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Tuesday, May 23, 2017

Controversy trails take-over of Port Harcourt refinery

According to reports, Controversy has continued to trail the proposed take-over of Port Harcourt refinery by Oando Plc, recently given wide reportage by the media.

The media attention however, appeared to have unsettled the management of Oando, which readily issued a statement in form of clarification, signed by its Chief Strategy and Corporate Services Officer, Ainoije Alex Irune, explaining that:

The company stated that with the concerted efforts of the Ministry of Petroleum Resources and the Nigerian National Petroleum Corporation (NNPC) to aggressively drive private sector led refineries rehabilitation and expansion programmes, Oando as local partner to NAOC/ENI will support the active rehabilitation of PHRC on activities of terminalling, logistics, structuring and funding. It explained that active negotiations are ongoing and it is expected that a final agreement will be reached by the end of July, 2017.
But ENI was one of the firms whose name featured prominently in the Malabu Scandal, a  scandal involving an alleged bribery saga between company  representatives and officials of the Nigerian government.   Its officials denied the charge.
Although mentioned as being involved, former President Goodlcuk Jonathan denied any participation in the alleged bribery supposedly paid to him through proxies.
However, according to the Bureau of Public Enterprises, BPE, privatisation of refineries, chronicle of events, obtained by  Sunday  Vanguard, the PHRC transaction process effectively commenced in March 2004.
It stated, “Bids by four bidders were received at the deadline of December 2, 2005: They included Essar Infrastructure of India; Oando Plc; Refinee Petroplus; and Transcorp Plc (now Bluestar Oil Service Limited Consortium). “On evaluation, it was discovered that all the four bidders did not meet the minimum qualification benchmark apparently due to misunderstanding of the provisions of the Request of Proposals circulated by CSFB.”
According to the BPE, “All the bidders’ technical bids were evaluated and recommended for the financial bid opening, scheduled for July 2006.
“The Bureau subsequently received a letter from the Honourable Minister of State for Petroleum Resources (now Minister of Energy) conveying Federal Government’s directive to suspend the conclusion of the privatisation of PHRC to enable government investigate a complaint by one of the bidders.

“The Economic Management Team (EMT) intervened to rescue the transaction and (complied)  with the Policy Support Instrument (PSI). Subsequently, the transaction was re-opened and fresh advertisements for expressions of interest were placed in December 2006. The deadline for submission of EOIs was January 19, 2007.”
BPE further stated that six bids were received from the following prospective investors: Mittal Investments Limited, Indorama International Finance Limited, Global Oil and Energy, LinkGlobal International Limited, Taleveras Group and Oil Works Limited (DFP Project Finance Limited).
BPE explained that “following evaluation of new Expression of Interests, EOI, approval was granted for prequalification of eight consortia. The firms recommended to proceed to the next stage included Essar Infrastructure of India, Oando Plc, Refinee Petroplus and Bluestar Oil Services Limited Consortium. Others included Mittal Investments Limited, Indorama International Finance Limited, LinkGlobal International Limited and Global Oil and Energy.
“BNP Paribas was engaged to conduct fresh valuation of the refineries.”
BPE noted that at the financial bid opening, Bluestar Oil Services Limited Consortium emerged the preferred bidder with a bid of $561 million. Other bidders were disqualified for breaching bidding rules. Refinee Petroplus was said to not to have presented the bank draft for 50 percent of their bid, while the bank draft (allegedly) provided by Oando Plc did not sum up to the 50 percent of their bid price as required in the bidding rules.
“NCP”, BPE then concluded,  “  ubsequently approved Bluestar Oil Services as the core investor in PHRC. Bluestar completed payment for the full amount of their bid price of $561 million on Friday May 25, 2007, and share certificate for PHRC was handed over to Bluestar Oil Services Limited on May 28, 2007,” BPE added.
Though the refinery was handed down over to Bluestar a day before former President Olusegun Obasanjo handed over power to late President Umar Yar’ Adua, the latter cancelled the privatisation exercise done for all the refineries. Prior to that, the Petroleum and Natural Gas Senior Staff Association, PENGASSAN and Petroleum and the National Union of Petroleum and Natural Gas workers, NUPENG, had protested that sale of the nation’s refineries. When  Sunday  Vanguard contacted the two unions, neither of them responded to calls nor text messages.  But according to Oando, it  “shares the vision of the Nigerian Government to become a petroleum product self-sufficient country in the short to medium term and ultimately be a net exporter of such products.
“Accordingly, pursuant to the Memorandum of Understanding (MOU) reached by the Federal Government and NAOC/ENI, Oando will partner with NAOC/ENI in the proposed rehabilitation of the Port Harcourt refinery (PHRC). This will be based on a repair, operate and maintain (ROM) agreement which will see PHRC’s capacity grow from its current 30 percent to 100 percent, its main capacity of 210,000 BPSD.”

Culled from VANGUARD
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