The Kaduna Refinery Turn-Around Maintenance (TAM)

Abubakar Atiku Nuhu-Koko

Ordinarily, carrying out routine turn-around maintenance (TAM) for an oil refinery shouldn’t attract any attention locally, nationally or internationally. The reason is that this is regarded as a normal oil refinery industry housekeeping standard scheduled activity or exercise all over the world except here in Nigeria, where it is seen and regarded as a major national achievement (if and only if conducted and successfully at all). 

Therefore, announcing the intention to commence the long-forgotten but albeit, long awaited TAM for the ailing and ageing Kaduna refinery, owned by the state-owned Kaduna Refinery and Petrochemical Company Limited (KRPC Ltd) – a subsidiary company of the Nigerian National Petroleum Corporation (NNPC) group of companies, is a newsworthy event for local, national and even, international consumption. The reason is not farfetched looking at the very poor and parlous state of affairs of Nigeria’s downstream petroleum sector over the years.

However, it is no longer news to the Nigerian public that Nigeria’s four dilapidated and moribund oil refineries have not been receiving the biannual industry standard mandatory TAM since time immemorial. For example, the Kaduna refinery has not received any industry standard TAM in last 10 years. 

This news or information was made public by the NNPC’s Chief Spokesperson, Dr. Levi Ajuonoma and the Managing Director (MD) of KRPC Ltd, Mr. Olayinka Agoro during a facility tour of the refinery preparatory to the commencement of its TAM scheduled to take place sometime in November this year. 

The TAM is to cost the nation a princely sum of $57.9m ($35m for the TAM and another $22.9m for materials for the services) as revealed by Mr. Agoro recently in Kaduna. The ten year period without TAM appears to be gearing towards making a world record or as one national daily puts it “gunning for the Guinness Books of Records as the oil company with the least turned around equipment.” Moreover, the existing refinery equipment and facilities are over thirty years behind in terms of modernity, safety and efficiency. 

Built at N504m, the refinery came on stream in 1980. It is Nigeria’s only inland-located refinery; located in the northern city of Kaduna, well away from the other three refineries, which are located in close proximity in the Niger delta oil and gas producing area of the country. It is linked by pipeline to the source of its local and imported crude oils feedstock from the Escravos terminal and with the other refineries and storage depots by pipeline network system.

One reason advanced as to why it was built in the north was to reduce the cost of transporting fuels to consumers in that very large expanse region of the country. When it was initially commissioned in 1980, it consisted of two 50,000 barrel per stream day (bpsd) crude distillation units (Fluid Catalytic Cracking Unit – FCCU); one of which is designed to process both domestic crude and imported crude used for the production of Lube oil.

Its capacity was later increased by another 10, 000 bpsd. This brings it to a combined name plate capacity of 110,000 bpsd as of present. The lubricants unit can process heavy oils (paraffin-based) imported from Venezuela to produce lubricating oils, bitumen, asphalt, sulphur, waxes and greases. A linear alkyl benzene (LAB) unit was commissioned at Kaduna on March 21, 1988.

All the four refineries suffer from the same lack of TAM and thus belong to the same sinking boat of dilapidated national fuel refining and supply infrastructures. After suffering from years of neglect, the Kaduna refinery was closed down in late July 1997 due to an accident. However, late in August 1997, a major French oil company, Total won a three-year contract worth about $200m to repair the plant, partly upgrade some of its units, and operate it. It was agreed that, after the three-year period, if by then local fuel prices had been raised to international market levels, Total may buy equity in the refinery. 

This arrangement did not go down well with the then new democratic administration heralded with the election of Chief Olusegun Obasanjo as civilian President of Nigeria in May 1999. Therefore, it was one of the fist casualties of Obasanjo’s major contracts cancellation and or repudiation exercise. The Obasanjo’s administration through the NNPC dismissed Total as a contractor in May 1999.

However, in another twist, the Obasanjo administration, rather pencilled down all the four refineries and petrochemical complexes and associated infrastructures for privatization as part the administration’s grandiose privatization andmarketization agenda.

In a bizarre move in the twilight of the administration’s handing over power to the incoming Presidency of Umaru Musa Yar’Adua in May 2007, the Kaduna refinery was sold off in what was considered a ‘fire-sale’ to a hurriedly formed consortium named Blue Star Ltd; a company largely owned by business moguls Aliko Dangote and Femi Otedola. 

The uproar generated by the sale caused President Yar’Adua to cancel the sale. But, 18 months since then, the refinery has been beset by more challenges; particularly from the incessant vandalisms of its main crude oils supply pipeline at the Chanomi creek end in the Niger Delta area. This means that even when the TAM is successfully completed the nation is not likely to see an end to refinery activity stoppages and products supply disruptions nationwide. 

Hence, the following pertinent questions need to be raised with the hope that those in position of authority can provide answers. What are the authorities doing to those committing these acts of economic sabotage and vandalism to the national economy with impunity? Put in another way, who are those behind making the refineries not optimally functioning and why? What are the authorities doing to stop these acts of vandalism and economic sabotage with impunity? 

Many Nigerians believe that most of the perpetrators of these nefarious acts are known to the authorities but ironically, they are freely enjoying their loot today and are still helping themselves to more ill-gotten wealth. They know that nothing can happen to them because, in Nigeria, one can get away with anything. But for how long will these acts of impunity continue unchecked? Why should some people continue to live above the law? Why should people continue to mismanage our commonwealth resources with impunity and get away with it? For how long shall the nation’s economic and financial assets continue to be pillaged with impunity? The nation urgently needs answers or solutions to this national curse. 

Abubakar Atiku Nuhu-Koko

Tuesday, 23 December 2008

Robot  # 1 | 23.12.2008 07:15

The Kaduna Refinery Turn-Around Maintenance (TAM) Abubakar Atiku Nuhu-Koko Ordinarily, carrying out routine turn-around maintenance (TAM) for an oil refinery shouldn’t attract any attention locally, nationally or internationally. The reason is that this is regarded as a normal oil refinery industry housekeeping standard scheduled activity or exercise all over the world except here in Nigeria, where it is seen and regarded as a major national achievement (if and only if conducted and successfully at all). Therefore, announcing the intention to commence the long-forgotten but albeit, long awaited TAM for the ailing and ageing Kaduna refinery, owned by the state-owned Kaduna Refinery and Petrochemical Company Limited (KRPC Ltd) – a subsidiary company of the Nigerian National Petroleum Corporation (NNPC) group of companies, is a newsworthy event for local, national and e...Read the full article.

Ispy  # 2 | 23.12.2008 13:22

I guess these are very pertinent questions the author has asked. It is also the question even the most unintelligent person on the street has been askng for a long time. However our so called leaders 'seem' clueless. I however believe the answers to these questions are known by those in government but possibly because of vested interest for example where the culprits are the major bankrollers of every election etc the hands of the government become 'tied', they having been compromised. This leads me to believe maybe the only solution probably would be to actually sell these refineries to those very individuals who are well known to all Nigerians.We needn't at the moment as strange and painful as this might seem, worry too much about whether they corruptly acquired the money or not or whether they are sold to cronies.They having bought them and invested so much money in them, would in a bid to recoup their investment actually ensure they run smoothly(so maybe the refineries should have remained sold to the Dangotes and Otedolas). I think peculiar problems deserve peculiar solutions and we all must agree that when things are labelled as being owned by the government, it becomes everybody's property and actually end up being nobody's property and is treated as such!!! The same problem has been afflicting the railway system in Nigeria where known truck and haulage company owners continue to hinder the development of the railways. Again the solution, sad as it may also seem, (but does not necessarily have to be so) is one which would be peculiar to Nigeria and that would also be to sell it to those very people !!! Once these 'public' utilities become private entities the owners primary goal would be to make profit,he no longer cares whether his employees are his family members, townsman, of the same religion or not but he immediately seeks the best hands that can deliver (whether they be from mars or the moon) and make his company run smoothly and profitably. A cue should be taken from Banks and Telecom companies of today. You can imagine if Globacom (which we learnt after the arrest of IBBs son during OBJ's tenure, actually consists of a huge investment by IBB) or Zenith bank were government owned. Or compare Nitel to say MTN or Globacom in terms of efficiency. . All these of course just like we have the CBN and NCC for banks and telecom companies would be regulated by the government. This is where the government would help ensure those now private companies truly serve the people and not only focused on making profit. Herein i truly believe lies the solution to a lot of Nigerias' ailing public enterprises.