The Independent Media and Policy Initiative (IMPI) has made a case for a forensic audit of expenditure incurred on the nation’s refineries from 2000 to 2023.
It also dismissed claims by the African Democratic Congress (ADC) that successive All Progressives Congress (APC) administrations spent $18bn on rehabilitating all four state-owned refineries.
In a policy statement which tracked the history of maintenance of the refineries and signed by its Chairman, Dr Omoniyi Akinsiju, the think tank was emphatic that ADC erred in its summation.
IMPI said: “We find it incredulous that the African Democratic Congress (ADC) will condition the sale of Nigeria’s sovereign-owned refineries on a forensic audit of the $18 billion allegedly spent on the four refineries.
”We do not have any misgivings about this otherwise innocuous demand. However, we readily perceive that the ADC was merely playing to the gallery by limiting the scope of the demanded forensic audit to the years since the All Progressive Congress (APC) emerged as the nation’s ruling party.
”We consider this a cheap and unserious effort at making an issue out of the protracted economic nuisance the government-owned and managed refineries had long turned into.
”We believe politicians, especially those supposed to provide the country with alternatives, should canvass issues based on credible, logical, evidence-based propositions.
”In this particular instance, we find it rather awkward that anyone claiming to be a true champion of probity and transparency in government affairs will insist that only successive administrations under the APC have collectively spent over $18 billion on the refineries, even as it added that the current federal administration has reportedly committed an additional $2.8 billion for such.”
To set the record straight, the think tank delved into history of several turn around maintenances since the 1990s and how billions of dollars were spent without results.
”In 1993, it became apparent that TAM had become desirable and compelling. However, rather than being attended to with the transparency it deserved, it became a source of slush funds and a side hustle for government and NNPC officials. For instance, a little-known Indigenous oil service company, Anchoff Strongholds, was contracted to conduct a TAM on the 125,000 barrels per day Warri Refinery and Petrochemical Company.
”Several media reports indicated that the TAM had little impact and, therefore, no consequence on the refinery’s technical standing. To address the issue, a probe panel chaired by the late Mr Aret Adams, one-time GMD of the NNPC, was instituted to investigate the WRPC TAM. The panel report recommended dismissing the WRPC managing director for his role in the scandal.
”The report also recommended the blacklisting of Anchoff Strongholds and their promoters and a ban on them from ever doing business with the NNPC. Despite the sanctions, the harm had already been done; the output and production capacity of the Warri Refinery tumbled from 60 per cent to 30 per cent.
”Curiously, in the same 1994, the primary promoter of the banned Anchoff Strongholds resurrected with Chrome Oil Services Limited and, in an inexplicable circumstance, secured the TAM of the second Port Harcourt 150,000bpd refinery. Again, the TAM was received with a lot of public dissatisfaction after it was reported that, rather than boost output, it declined to less than 40 per cent.
”Overall, the TAM gobbled $216 million. Translated, in fiscal terms, $216 million went down the drain. Mr Chamberlain Oyibo was GMD of the NNPC at this time (1993 – 1995)
”NNPC, under the leadership of Mallam Dalhatu Bayero (1995-1999), spent $92 million on the same Port Harcourt Refinery TAM in 1998,” the group said.
IMPI added that things got worse under civilian rule, beginning from the administration of former President Olusegun Obasanjo.
”However, the whole narrative relating to unexplained monies expended on TAM took another shape from 2000 during the Olusegun Obasanjo/Atiku Abubakar Presidency.
”Mr Gaius Obaseki, NNPC’s GMD between 1999 and 2003, provided the background to this scenario in an interview in November 2000, in which he gave details of the state of the country’s four refineries.
”Noting that he was satisfied with the state of things, he explained that the 150,000 bpd capacity Port Harcourt Refinery was running at 75 per cent, though it could run at 100 per cent. But he noted that professionally, he will be doing himself damage because the cracker—the fluid catalytic cracking units—will not be in place until the middle of 2001.
”By Obaseki’s estimation, the 150,000 bpd Port Harcourt refinery would be running at 100 per cent by mid-2001, subject to the availability of crude oil. He also said the Kaduna refinery was running at 60 per cent after a lot of maintenance work. This performance, he promised, would be tremendously increased, such that by 2001, the Kaduna refinery would operate at the same level as PH Refinery.
”However, there was a caveat: These growth projections will be realised “if we are left to do our work.”
”Under the Obaseki leadership of NNPC, the administration spent $1.67 billion on the refineries within four years, 1999 to 2003, and a further $39.7 million under Mr Funsho Kupolokun’s leadership between 2003 and 2007. However, by the middle of 2003, all the refineries were in different states of dysfunction.
”To show the level of disrepair of the refineries despite the $1.6 billion expended on them between 2001 and 2003, the Bureau of Public Enterprises (BPE) lamented that all the refineries needed a complete overhaul due to bad management and poor maintenance culture, which considerably reduced refining output.
”A more serious consequence is that the country was forced to import petroleum products, resulting in a massive waste of scarce foreign exchange. Following the operational failure of the refineries, the then federal government resorted to wholesale fuel importation, which had serious consequences for the economy.
”We note the outcome of the Nigeria Extractive Industry Transparency Initiative’s audit of the refineries between 1999 and 2004, which affirmed that: “The importation process, including the tendering, contracting and procurement practices, falls short of current good practice standards, and it is questionable whether they fully protect interests in many areas of the process. There was a lack of written procedures.”
The think tank also noted that inspite of all the expenditure, a 2015 in-house NNPC report was emphatic that no proper maintenance was done on the refineries after 2001
”Between 2000 and 2015, three different administrations of the People’s Democratic Party spent $4.66 billion on the nation’s four refineries. This does not include operational and other associated costs.
”Yet by mid-2015, an NNPC report provided a summary of the state of the refineries: “The refineries recorded heavy losses in their operations in 2015 due to low refining capacity, prolonged maintenance issues and pipeline vandalism. The last time there was a routine intervention on the facility was in 2000. The components of the refineries have reached the point where they have to be replaced, as opposed to what we call turnaround maintenance, which is servicing.
”It is such an old plant, and we are having difficulties getting some components. We can’t find some of the old manufacturing companies again. Whenever the refineries managed to resume production after lengthy repair work, they hardly worked for up to 90 days before they were shut down, and the purported maintenance cycle continued.”
”This narration should be sobering to any forward-looking Nigerian. We were bewildered because the ADC statement called for an investigation of TAM expenditures under the APC administrations,” IMPI said.
”On the involvement of APC administrations in the refineries, it pointed out that it was limited to the different approach adopted by the late President Muhammadu Buhari.
”We know no new TAM exercise has been commissioned under the current federal administration. As it were, President Bola Tinubu’s predecessor, former President Muhammadu Buhari, now late, inherited the state of the four national refineries as described above.
”Expectedly, no frugal-minded and nominally committed Nigerian will be compelled to redress the untoward state of those national assets with the record of wasted expenditures. However, the late President may have fallen into the benign trap of sunk cost syndrome.
”In this regard, former President Buhari has our sympathy. In addition to the funds sunk into the refineries, his administration was also burdened with the fiscal load of subsidy payments on the nation’s imported fuel consumption, eroding foreign exchange savings.
”Of course, the powerful labour unions in the NNPC were insistent on the possibility of resuscitating the refineries to justify continued salary payments and the sustenance of the refineries’ workers, and the NNPC management was also very forceful in this regard.
”It was, apparently, easy for the late President to capitulate. Beginning in 2021, the Federal Government awarded an Italian company, Tecnimont SPA, a $1.5 billion contract to rehabilitate the Port Harcourt refineries, while about $1.484 billion contracts were awarded to Saipem SPA and Saipem Contracting Limited to rehab the Kaduna and Warri refineries, respectively.
”While one of the Port Harcourt facilities momentarily resumed crude processing in late 2023, it shut down again in May 2025 for maintenance. The Warri and Kaduna refineries, aged 46 and 44 years respectively, remain under rehabilitation.
”Meanwhile, we must clarify the scope and scale of work done from the spending on refineries under the Buhari administration. This is well captured in the words of the immediate past GCEO of the NNPC, Mr Mele Kyari, who commented, “We are not doing turnaround maintenance; we are doing rehabilitation of the refineries, and this is very different. It means that we are replacing certain major components. In rehabilitation, we normally don’t shut down the plant completely. We repair a segment of it, and then it starts working, and then you move to the next segment. You continue to scale up, which is why, within the four years, the contractor would have completely left your premises.”
”We do not object to conducting a forensic audit on all four refineries, but we believe it should cover the period 2000 to 2023. This will capture the active disbursement period and help the nation understand what happened in those years, which will inform policy positions in the midstream sector of the oil and gas industry going forward,” it said.
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