Ahmed Dikko; Round Peg In Round Hole Of Port Harcourt Refining Company Limited Rehabilitation

By Adewole Kehinde

When Ahmed Dikko was appointed as the 13th Managing Director of Port Harcourt Refining Company Limited, he reassured Nigerians of ongoing, concerted efforts to enhance the refining capacity of the plant.

The company is a subsidiary of the Nigerian National Petroluem Corporation (NNPC) and its management is saddled with the task of getting the plant up and running to full capacity to fulfill local fuel needs of the nation.

Let me go into brief about the Refinery to have full understanding of what Ahmed Dikko has done so far.

The Refinery Complex comprises two refineries at Alesa-Eleme near Port Harcourt in Rivers State.

Port Harcourt II (New Refinery) is a complex, conversion refinery with a nameplate distillation capacity of 7,500,000 MTA (150,000 bpd). It came on stream in 1988 and was originally intended to serve as an export refinery.  It has been subsequently dedicated to domestic market service given frequent interruptions in supply from the other three refineries in Nigeria. Port Harcourt II has considerable clean fuel capability, including lead-free gasoline.

The Company has an authorized Share capital of N5 million, divided into 5 million Ordinary shares of N1 each. Preparatory to its privatisation, the Company is being incorporated as a separate business entity outside NNPC. This will lead to the creation of a new Capital structure for the company.

The two refineries have two main facilities respectively- the main processing units and the utilities and tank farms.

The old Refinery has its own utilities and tank farm. The utilities consist of water boreholes, water treatment, cooling water tower, instrument air and steam boilers. The only utilities supplied from the new refinery are power and nitrogen by air. The old refinery is designed to generate its own gas as process fuel. However, this is generally supplied from processing LPG from storage through the LPG plant to provide sufficient gas to operate the old refinery.

The Refinery is configured to produce various yields of the following crude oil products: Crude, Low Pour Fuel Oil (LPFO); LPG, High Pour Fuel Oil (HPFO); Gasoline, Fuel Gas; DPK, AGO

The combined capacity of the two refineries is 210,000 barrels per day. The old refinery was designed to process 60,000 b/d of TNP, a blend of Medium Nigerian Crude oil, whilst the new refinery is capable of processing third party crude oil.

Recent processing performance is much below design capabilities in terms of both refinery throughput and the yield of a higher valued product slate.  The refinery has seldom operated above 50% of design capacity and the 1990’s saw a gradual decline in refinery throughput with proportionately increasing yields of lower value fuel oil product.  

Following the Turn Around maintenance carried out in 2000, throughput improved its level of performance.  Until 1995, the yield performance of the refinery was in line with design. The design expectations were 33% gasoline, 42% middle distillate with just 19% fuel oil and 5% for fuel loss, plus 1% LPG.

Poor maintenance of facilities and inadequate manpower has over the years been the major reason for epileptic performance of the refinery.

With a capacity to refine 210,000 barrels per day out of the local capacity of 450,000 the refinery, if well operated, will cater for the large market existing for petroleum products in Nigeria and West Africa.

On 1st of December, 2020, the Nigerian National Petroleum Corporation (NNPC) opened a new chapter in its refineries rehabilitation project with the public opening of bids for the Engineering, Procurement, and Construction phase of the rehabilitation of the Port Harcourt Refining Company (PHRC).

The event, which held virtually, had in attendance external observers such as the Bureau of Public Procurement (BPP), Nigeria Extractive Industries Transparency Initiative (NEITI) and the Civil Liberties Organizations (CLO). This signals the imminent take off of the second phase of the rehabilitation of the Port Harcourt Refinery whose first phase was completed earlier in the year.

Speaking at the event, the Group Managing Director of NNPC, Mallam Mele Kyari, restated the Corporation’s commitment to revamping the four Refineries including the Warri Refinery and the Kaduna Refineries.

The GMD who was represented by the Chief Operating Officer, Ventures and Business Development, Engr. Adeyemi Adetunji, stated that the revamp of the state owned refineries would ensure reduction of petroleum products importation, create jobs and improve the national economy for the betterment of the people.

He said NNPC would continue to collaborate with all relevant stakeholders in order to ensure the growth of the nation’s refining capacity.

Speaking in a similar vein, the Chief Operating Officer, Corporate Services, Engr. Mohammed Ahmed, applauded the Bureau of Public Procurement (BPP), the Infrastructure Concession Regulatory Commission (ICRC), Nigeria Extractive Industries Transparency Initiative (NEITI) and the Civil Liberty Organizations (CLO) for their sustained collaboration with the NNPC in ensuring the entrenchment of the Transparency, Accountability and Performance Excellence (TAPE) policy of the current management of the Corporation.

On his part, the Managing Director of PHRC, Engr. Ahmed Dikko, said the Company was ready to commence the EPC phase of the rehabilitation of the plants, stressing the a team has already been set up coordinate and actualise the EPC phase of the job.

In her welcome address, the Group General Manager, Supply Chain Management, Mrs. Aisha Katagum, commended the bidders for scaling through the rigorous pre-qualification evaluation exercise to the technical phase, noting that due to the Covid-19 pandemic the bids were submitted electronically and would be viewed virtually. 

Throwing more light on the PHRC EPC bid opening exercise, the General Manager, Supply Chain Management, Sophia Mbakwe, said the bids were submitted through the NipeX portal for the pre-qualification for technical evaluation, assuring that the process provides a level playing field for all bidders.

Few days ago, National Assembly Joint Committee on Petroleum Industrial Bill led by Distinguished Sen. Sabo Mohammed Nakudu and Co-chair, Hon. Mohammed Tahir Monguno visited Port Harcourt Refining Company as part of National Assembly efforts to develop a proper framework for the downstream sector in the Petroleum Industrial Bill.

Ahmed Dikko received assurances of the National Assembly support to the rehabilitation of Port Harcourt Refining Company after brief presentations on the current efforts being made with the planned rehabilitation project and a plant tour of the facility

Despite COVID-19, the company under Ahmed Dikko is on course to fulfill its scheduled plans of action; superintending over the Phase 2 of the rehabilitation project.

I see the Refinery operating at 90 – 95% capacity under the Management of Ahmed Dikko and with current crude prices is expected to recoup its investment and make profits in just a few years of operations.

I am confident that Ahmed Dikko will be able to bring Port Harcourt Refining Company up and running for the benefit of all Nigerians.

Adewole Kehinde is the Publisher of Swift Reporters and can be reached via 08166240846, 08123608662

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