Nigerian govt mulls state oil firm's plan to privatize refineries - NNPC chief

By Libby George
LAGOS, March 23 (Reuters) - Nigeria's government is
considering a plan backed by state oil company NNPC for it to
become a minority shareholder in its beleaguered oil refineries,
the NNPC chief said in an interview on local television.
NNPC is working to revamp the refineries, which are
currently shut down entirely and have produced little to no fuel
over the past decade due to poor maintenance. NNPC has said
private companies would operate them after works are complete.
Last week, the cabinet signed off on a $1.5 billion
rehabilitation plan, funded largely by Afrexim Bank, for the
Port Harcourt refining complex, which has a capacity of 210,000
barrels per day. NNPC Group Managing Director Mele Kyari told Channels TV
that enabling the private sector to own stakes in and run the
refineries was key to the project's success.
"Our considered view...is to go to what we call the NLNG
model, where NNPC becomes a minority holder in the asset. We
will bring in private sector so they can take equity in this
refinery, and then we continue to grow that business," he said.
Kyari said the government is considering the proposal, but
he did not say whether it had signed off on it. Approval from
President Muhammadu Buhari, who holds the oil portfolio, is
necessary for major changes to the sector.
A spokesman for Buhari declined to comment on the proposal.
In a statement issued on Tuesday, NNPC said the "Operate &
Maintain" model was "one of the key requirements by the lender"
for the Port Harcourt project.
Buhari has blocked previous proposals to privatize the
refineries, but multiple efforts over the years to provide
crucial maintenance and upgrades have all failed. The press
release said Port Harcourt had not conducted routine maintenance
for 21 years. Typically, works are essential every two years.