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Renowned human rights lawyer Femi Falana (SAN) has attributed the federal government’s decision to revoke a Public-Private Partnership (PPP) deal for the Port Harcourt, Warri, and Kaduna refineries in 2007 to the questionable circumstances surrounding the arrangement under former President Olusegun Obasanjo.
Responding to Obasanjo’s recent remarks about how his successor, the late Umaru Musa Yar’Adua, refunded $750 million paid by a consortium to manage the refineries, Falana emphasized that the deal lacked transparency. Speaking on behalf of the Alliance on Surviving COVID-19 and Beyond (ASCAB), he accused Obasanjo of bypassing the Privatisation and Commercialisation Act and sidelining then-Vice President Atiku Abubakar, Chairman of the National Council on Privatisation (NCP).
Falana noted that Obasanjo’s administration sold a 51% stake in the Port Harcourt refinery to Bluestar Oil for $561 million on May 17, 2007, followed by a $160 million sale of a similar stake in the Kaduna refinery on May 28, 2007. Bluestar Oil, a consortium comprising Dangote Oil, Zenon Oil, and Transcorp, had connections to Obasanjo, who allegedly held significant shares in Transcorp via a “blind trust.”
Critics, including labor unions such as the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), challenged the legality and propriety of the sales. They argued the nation was shortchanged, citing that the $516 million paid for the Port Harcourt refinery was far below its estimated $5 billion value.
The unions organized a four-day nationwide strike in June 2007, which nearly crippled the economy. The strike was suspended after assurances from the federal government that the transactions would be investigated. Ultimately, Yar’Adua annulled the sales, a move that was never legally contested, as the deals violated the Privatisation and Commercialisation Act.
Falana urged NUPENG and PENGASSAN to remain vigilant against new calls for the privatisation of refineries, warning against any action that might compromise national interests. He advised those advocating for refinery privatisation to establish their own facilities, akin to the Dangote Group.
Obasanjo Questions NNPCL’s Claims on Refinery Revamp
Former President Obasanjo expressed skepticism over the Nigerian National Petroleum Company Limited’s (NNPCL) claims of reactivating the Port Harcourt and Warri refineries after years of inactivity. He likened the situation to a Yoruba proverb, implying that any claims without evidence are untrustworthy.
Reflecting on his administration, Obasanjo disclosed efforts to involve Shell in managing the refineries, which were rebuffed due to corruption concerns, insufficient maintenance, and the small capacity of the facilities. After Shell’s withdrawal, a consortium led by Dangote paid $750 million to engage in the PPP arrangement, only for the funds to be refunded by Yar’Adua.
Obasanjo also criticized the government’s alleged mismanagement, stating that over $2 billion had been wasted on the refineries since the deal’s cancellation, with no tangible results.
NNPCL Invites Obasanjo to Inspect Refinery Overhaul
The NNPCL has invited Obasanjo to witness the progress made in rehabilitating the refineries. Olufemi Soneye, Chief Corporate Communications Officer of NNPCL, emphasized the company’s transition into a profit-driven global energy leader under a new business model. The company has reportedly undertaken comprehensive overhauls of the Port Harcourt, Warri, and Kaduna refineries to meet world-class standards.
Soneye credited the success to President Bola Ahmed Tinubu’s transformative energy policies and the leadership of GCEO Mele Kyari. He described the rehabilitation efforts as pivotal in redefining Nigeria’s energy security and ensuring sustainable operations.
NNPCL extended an invitation to Obasanjo to tour the refurbished refineries and acknowledged his contributions to Nigeria’s development, emphasizing the need for collective efforts in ensuring the nation’s energy security.