FG halts refineries’ privatization, says Ajaokuta Steel problem complex

The Federal Government has halted its plan to privatize Nigeria’s refineries following demands by the Nigerian National Petroleum Corporation to allow the corporation to revitalize the dormant facilities.

Also, the Federal Government said on Monday that the problem with the Ajaokuta Steel Company was very complex, although efforts were ongoing to resolve the issues.

Director-General, Bureau of Public Enterprises, Alex Okoh, who spoke to journalists in Abuja while presenting updates on the bureau’s 2021 work plan, said all the refineries under the NNPC management were in various stages of non-production.

He said, “We have four refineries with a refining capacity of 445,000 barrels per day and they are all at various stages of non-production. I don’t have the figures correctly, but I think that Warri would be around five per cent, Port Harcourt around 19 (or) 20 per cent and Kaduna is zero.

“Our plan initially was to suggest to the Federal Government that we should privatize these refineries, no need to put in more money, especially given the fact that you also have private investors going into space.

“Dangote (Refinery) is looking at about 650,000 barrels per day, so the combined refining capacity for all of our four refineries is not even up to that. This means you are going into space where the competition will almost kill you.”

Okoh added, “So we thought we should privatize, but NNPC believes that the plants can be rehabilitated and they have got the government approval to go ahead and rehabilitate the refineries.

“So we have dropped the privatization from our 2021 plan. But I’m sure we will follow with keen interest how the rehabilitation program of the NNPC will go from here.”

The Federal Government had earlier in the year stated that it would sell or give out in concession some of its assets to raise funds to finance the 2021 budget.

In January 2021, the Minister of Finance, Budget, and National, Zainab Ahmed, told lawmakers that the Federal Government would sell selected properties to fund this year’s budget.

The BPE had earlier in the year itemized Nigeria’s refineries as assets to be privatized and classified them as core investor sales, but the amount to be earned from the facilities was not stated as of then.

On Ajaokuta steel, the BPE boss described the problem with the plant as being very complex.

Okoh said, “For Ajaokuta, it’s a very complex issue. Currently, there are negotiations with GINL, who are the original concessionaires of Ajaokuta and it’s a very complex problem to untangle.

“But I can, without divulging too many details, state that we are close to being able to resolve the issue, especially the litigation around Ajaokuta and once that is done we can then go ahead and make a decision on what to do with Ajaokuta.”

Okoh said the Federal Government planned to earn a total of N493.4bn from the sale or concession of about 36 of its assets across the country.

He said the reprivatization deal of Yola Electricity Distribution Company was being concluded on Tuesday, as he noted that the Transmission Company of Nigeria was up for concession.

He explained that assets that were up for sale or concession had been classified under energy assets, industries, and communication department, as well as development institutions and natural resources.

Others include infrastructure and public-private partnerships and post-transaction management departments.