Why FG shut down all refineries – NNPC

The Group Managing Director of the Nigerian National Petroleum
Corporation, Mele Kyari, says the four oil refineries in the country
have been shut down in Port Harcourt, Warri and Kaduna.

Kyari who said this on Wednesday, explained that all four refineries were functioning below capacity and it had thus become necessary to stop them from operating altogether.

Responding to a question, the NNPC boss said, “First, all the four
refineries in three locations are shut down and it was a deliberate
decision for two reasons. One is that delivery of crude oil to these
refineries is completely challenged because the pipeline network has
been completely compromised by vandals and all kinds of people that
will not allow us to operate these pipelines.

“That means you are not able to deliver crude oil to these refineries
effectively to their maximum capacity. Secondly, what you call
rehabilitation is different from the turn around maintenance.
Turnaround is routine which every refinery does but when you talk
about rehabilitation, it is that colossal loss of capacity in the
refinery and it means you haven’t done the turnaround maintenance
properly.

“Typically, every refinery is expected to operate at 90 percent of
its installed capacity. With the best of effort, with all the
turnaround maintenance that has taken place, it is impossible to run
any of the refineries before the shutdown at that level. Our estimate
was to run it at 60 percent of capacity but if you do that, all you
are doing is value destruction. You will take $100 crude into the
refinery and bring out $70 product. It doesn’t make sense.”