The Nigerian National Petroleum Co. Ltd. (NNPC) has opened bidding for operation and maintenance rights for the under-repair Port Harcourt refinery in the oil-rich Niger Delta.
The refinery has a total crude distillation capacity of 210,000 barrels per day at two plants, according to information from the Bureau of Public Enterprises (BPE). The older of the two was built 1965 while the second was built 1989.
The NNPC is currently rehabilitating the refinery under a two-phase $1.5-billion project. Phase one targets to put the complex onstream at a 60 percent utilization rate while the second phase involves raising the utilization rate to 90 percent, according to a report from the Nigerian Television Authority March 22, 2019.
The NNPC reported December 21, 2023, the project has reached mechanical completion while the entire rehabilitation achieved 77.4 percent completion as of the time.
The NNPC is now looking for “reputable and credible Operations & Maintenance companies to operate and maintain one of its refineries, Port Harcourt Refining Co., to ensure reliability and sustainability to meet the nation’s fuel supply and energy security obligations”, said the invitation for expression of interest.
The state operator restricted bidders to those with an annual turnover of at least $2 billion from 2019 to 2022.
Besides operation and maintenance experience, technical requirements include experience with fluid catalytic cracking and conversion units, as well as experience in commissioning, post-commissioning and turnaround. Interested companies must also have conducted relevant business in Nigeria or other parts of Africa.
Bidders must be actively registered with the regulatory bodies in their respective countries of incorporation, with registration validity beyond 2023.
Bidders have until February 26, 2024, to file all requirements.
The government plans to privatize Port Harcourt Refining Co. It has an authorized share capital of NGN5 million ($5,480), consisting of five million ordinary shares priced NGN 1 ($0.001) each, according to the company’s profile on the BPE website. While under state control, it is being incorporated as a separate entity outside NNPC to allow for a new capital structure for the refinery operator, the profile says.
The company’s 1999–2004 income data on the BPE website shows it was unprofitable 2000 onward. The refinery rarely operated above 50 percent of its capacity, according to the BPE.
“Poor maintenance of facilities and inadequate manpower has over the years been the major reason for epileptic performance of the refinery”, the BPE says.
However, “[t]he Refinery operating at 90 – 95 percent capacity and with current crude prices is expected to recoup its investment and make profits in just a few years of operations”, according to the BPE.
The newer of the two refining plants was originally intended for export. “It has been subsequently dedicated to domestic market service given frequent interruptions in supply from the other three refineries in Nigeria”, the BPE says, adding Port Harcourt II is also designed to produce clean fuel.
Full operation is targeted to be reached this year, based on NNPC’s update last month.
“We want to be at the highest level of production so that we will keep the prices of petroleum prices in the country stable in order to give comfort to our people and generate more revenue for our country”, NNPC board chair Pius Akinyelure said in that announcement.
The NNPC has opened bidding for operation and maintenance rights for the under-repair Port Harcourt refinery.