NNPC shuts down Warri refinery over crude oil shortage

The Nigerian National Petroleum Corporation, NNPC, yesterday, stated that it has shut down the Warri Refineries due to operational challenges.Group General Manager, Group Public Affairs Division of the NNPC, Mr. Ohi Alegbe, who disclosed this, noted, however, that the refinery is expected to be reopened for operations on Tuesday.

According to him, the decision to shut down the Warri refinery was taken because there was insufficient crude oil in the system.

“They are supposed to have at least a 25-day sufficiency in the supply of crude. So because of the depletion in the volume of crude they have had to temporarily shut down.

“It was shut down on Monday. This is a temporary measure and it should be up and running by Tuesday.”

The NNPC, had a few days ago, stated that after proper evaluation and in line with the terms of contract for the delivery of crude oil to the nation’s refineries in Warri, Port Harcourt and Kaduna, the Corporation has cancelled the current contract due to exorbitant cost and inappropriate process of engagement.

The NNPC had stated that this measure is aimed at reducing cost and strengthening the operational efficiency across its value chain.

As a stop-gap measure, the NNPC said it has engaged NIDAS Marine Limited, a subsidiary of the NNPC, to provide crude delivery service on negotiated industry standard rate pending the establishment of substantive contract.

The NNPC, however, explained that it resorted to the delivery of crude oil to the refineries by marine vessels following incessant attacks on the Bonny-Port Harcourt refinery pipeline and the Escravos crude pipelines by vandals and oil thieves resulting in the complete unavailability of the pipelines in 2013.

“We have also commenced a rigorous and transparent process of securing capable and competitive contractors for the delivery of crude oil by marine vessels to Port Harcourt and Warri/Kaduna Refineries pending the restoration of the crude pipeline infrastructure,’’ the corporation added.

The NNPC further disclosed that it had obtained the permission of President Muhammadu Buhari to kick-start the tendering process for the 2015/2016 Crude Oil Term Contract for the evacuation of Nigeria’s crude oil equity from the various crude and condensate production arrangements.

According to the NNPC, the process which would commence with the advertisement of the Crude Oil Term contract in both National and International print media for a period of one month has been carefully structured to weed out ‘briefcase companies’ and rent seekers.