Petrol Production: Controversy Surrounds Port Harcourt Refinery, NNPCL Claim

The operational capacity of the recently rehabilitated Port Harcourt Refining Company faced significant scrutiny on Thursday.

Allegations surfaced that petroleum products loaded from the facility on Tuesday were not newly refined but were, instead, products stored in its tanks for over three years.

This situation has reignited skepticism surrounding the refinery, which has experienced repeated delays and missed deadlines, with seven failed attempts to resume operations.

Timothy Mgbere, Secretary of the Alesa community stakeholders, claimed during a Thursday interview that the refinery’s 60,000 barrels per day capacity is far from being fully operational, contradicting the Nigerian National Petroleum Company Limited’s (NNPCL) assertions.

The Alesa community, located in Eleme, Rivers State, hosts the Port Harcourt refinery.

Mgbere alleged that only six trucks of petroleum products were loaded on Tuesday, despite NNPCL’s claim that 200 trucks would be dispatched daily.

He further highlighted that the ceremony marking the plant’s reopening was largely symbolic, stating that full operations had not commenced.

Industry experts have called on NNPCL to substantiate its claims by selling products directly to oil marketers. However, NNPCL spokesperson Femi Soneye declined to respond to inquiries on the matter.

The refinery resumed operations on Tuesday after years of inactivity. NNPCL stated that the revamped complex of the old refinery operates at 70% of its installed capacity, producing diesel, Pour Fuel Oil, and other petroleum products. According to NNPCL, the facility is expected to release 200 trucks of petrol daily into the Nigerian market.

However, Mgbere described the reopening event as a superficial showcase, adding that not all units of the old complex are functional. He insisted that what was presented to the public does not reflect the reality on the ground.

Mgbere further criticized the refinery’s automation claims, stating that inefficiencies remain evident.

He also accused the contractor of incompetence, pointing out that the project was heavily reliant on subcontractors, many of whom lacked the required equipment.

He said, “The Port Harcourt refinery, and by extension, the Port Harcourt depot, happens to be the mainstay of the Alesa community economy. The economic activities emanating from the operations of these depots mean a lot to us as a community people, but as it were, now, I don’t think it’s a cause for celebration yet because what we are having in the media space is different from what we have on the ground.

“I can tell you on authority as a community person, that what happened on Tuesday was just a mere show at the Port Harcourt depot. A mere show in the sense that the Port Harcourt refinery, we call it area five, that is the old refinery, is merely in skeletal operation. When I say skeletal, I mean that some units of the refinery were brought up and are running, but not the entire unit of the old refinery is functional, as we speak.

“I will give them the credit that at least they have started something, but not to say, according to the Head of Corporate Communication, Femi Soneye, like it is in the media that they are already producing 1.4m barrels per day. That’s not the case. That’s not true. I don’t want to use the word lie, but as an agency that is holding the oil industry in trust for Nigerians, they shouldn’t put out information that is not true.”

He argued that “the true picture of what happened on Tuesday is that the NNPC has been under pressure to televise to Nigerians that everything is okay and that the old refinery has started functioning.

“I can tell you that the MD or the CEO of the refinery, was in Port Harcourt since Monday; the other MDs were also in Port Harcourt. The MD of Port Harcourt refinery and those heading the operations department didn’t sleep through the night of Monday to Tuesday because of the whole event they had on Tuesday.

“What is the true picture? The Old Port Harcourt refinery is built with its utilities, different from the new complex. The tank farm that is servicing the Old Port Harcourt refinery has a different loading gantry at the depot.”

Continuing, he said, “The party they had on Tuesday was held at the new loading gantry that is directly connected to the new refinery. And so, how does that work? It is impossible. The feedstock storage facility for the old refinery had some stock, old stock that has been there for over three years.

“And so what they did was to release that stock, and then loaded six trucks and then televised it to Nigerians that it is the production from the old refinery. That’s not true. And so I like Nigerians to know the truth, but they don’t need to believe me, because Nigerians, no matter how you paint the true pictures to them, they get sentimental. They get tribalistic. They want to whip some sentiment and all that the product that was loaded. But let it be on record that it was only six trucks that they used to calibrate the new loading gantry. The product was not a new refined product from the old refinery.”

Energy experts echoed Mgbere’s concerns, urging NNPCL to disclose the source of its feedstock and the state of its distillation points.

Bala Zaka, an energy consultant, questioned why products were being stored rather than immediately released to the market, arguing that such practices increase costs unnecessarily.

He said in a telephone interview with The PUNCH, “Generally, when a company produces a product regardless of the type or time, whether it is biscuit or toilet rolls. The first thing you do immediately when products come out of production is to send them to the market. You send them out to customers.

“There is a concept in accounting called the Just In Time concept, when you apply this, there is no provision for a storage warehouse or depot. You would want to save the cost of storage. That simply means as the products are coming out of production, oil marketers are waiting to evacuate them, which is good for the facility and the industry because you won’t pay for storage.

“So when dealers are waiting for an organization to release their products and state their price and it is the organization that is holding back, then something questionable is there. There is something suspicious because ordinarily, you need to save costs of storage.

“Also, we have Nigerians who are practicing petroleum engineers and last week, we had our Annual General Meeting. I can tell you that there was no mention of the refinery at all. There is no way technicians or engineers who are sure it has been put into order or reached completion would not have hinted to us at the meeting that the refinery would soon come on stream. That is very strange. It is just like having a pregnant woman giving birth without anyone seeing the pregnancy. You can’t hide the progression.”

The petroleum engineer added, “Fitting a refinery, trying to test it, and supplying initial feedstock can’t go without being noticed by anyone. How many people saw tankers, rail lines, or pipelines delivering crude to the refinery? If it is from an oil well, which oil wells are within that axis? NNPCL should tell us where it got its feedstock and for how long will the crude oil supply continue. They should also reveal the agreement signed with the crude oil supplying company.”

Meanwhile, the Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed cautious optimism.

IPMAN’s National Publicity Secretary, Chinedu Ukadike, stated that independent marketers would wait until the end of the week before drawing conclusions about the refinery’s performance.

“Well, we are delighted that the refinery that had suffered multiple postponements has commenced. We are very happy about it. The mechanical and technical aspects of the refinery are what we don’t know.

“You can also notice that there is a kind of community problem based on the contract because the guy also contradicted himself talking about contracts and other things. So, these issues, we don’t want to dabble into.

“But we are ready to load petroleum products once NNPC reviews its price and is willing to sell to us. Now, they are only servicing their stations. So, our boys are ready. Our offices have been cleaned up. And we are waiting for product directives,” Ukadike said.

He added that IPMAN would wait till the end of Friday before making comments.

“We will comment on this issue if, by the end of Friday, loading does not continue consistently. We will have to comment on this issue then. But for now, I don’t think any independent marketer will have anything against the refinery and the opening of the rest of them.

“These allegations are too serious to be called a joke. I don’t want to preempt anything for now. I have to reserve my comment. But I also want to let you know that at the working stage of that refinery, we had a pathfinding visitation with the National President of IPMAN when the MD of the refinery conducted us around and showed the tremendous efforts they have put in and those things they have changed to make the refinery come on stream.

“So, I will not believe that all those things are a mirage. I pray that they are not a mirage because it will still take us back to the mono source of petroleum products, which is not healthy for deregulation,” he stated.

In response to the criticism, the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) defended the refinery’s operations. PETROAN’s Publicity Secretary, Joseph Obele, asserted that the old Port Harcourt refinery is functional, producing refined petroleum products at 70% capacity. He encouraged doubters to verify these claims through a facility tour.

Obele emphasized that the facility currently refines 60,000 barrels per day, while the new refinery, with a capacity of 200,000 barrels per day, remains under rehabilitation. He also revealed that the Senate Committee on Petroleum Resources recently visited the refinery and confirmed its operational status.

Separately, the Major Marketers Association of Nigeria (MEMAN) reported significant progress in PMS distribution from the Dangote Petroleum Refinery, highlighting over 251 million liters of PMS loaded in the past 10 weeks. MEMAN Executive Secretary Clement Isong noted that vessel transportation has improved efficiency, making the Dangote Refinery a preferred supply source.

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