Oil and Gas

How Nigeria’s refineries lost 218 workers, N69bn

 

Data from the financial statements of Nigeria’s refineries, newly provided by the Nigerian National Petroleum Company Limited, showed that the number of employees dropped by 218 within a year, while the facilities registered a cumulative comprehensive loss of N69.03bn over the review period.

The Nigerian National Petroleum Corporation runs Nigeria’s three refineries: the Kaduna Refining and Petrochemical Company, the Warri Refining and Petrochemical Company, and the Port Harcourt Refining Company.

An review of the financial accounts of the three refineries revealed that although KRPC reduced its personnel by 105 employees, WRPC reduced its workforce by 113 employees, but PHRC made no mention of staff reductions.

During the period under review, KRPC posted a loss of N22.89 billion, WRPC lost N19.63 billion, and PHRC lost N26.51 billion.

In its annual report/financial statement for the year ending 31 December 2021, Kaduna Refining and Petrochemical Company noted that inadequate operational funds posed a significant difficulty.

Regarding people, it was reported that Kaduna refinery’s employee strength decreased by 105 workers from 630 in the first quarter of 2021 to 525 in the fourth quarter.

The report revealed that at the end of Q1, Q2, Q3, and Q4 2021, KRPC had 630, 580, 525, and 525 employees, respectively.

According to the company’s statement regarding operational performance, due to refinery rehabilitation preparations, no crude oil was received or processed at KRPC in 2021.

Also according to the report’s analysis of KRPC’s financial performance, “the business generated an operational loss before tax of N36.66bn, representing an increase of 29.83% from N28.23bn in 2020.

“This was largely due to a surge in depreciation charges as more fixed assets were transferred from CHQ (Corporation’s Headquarters) during the period under review.

“However, adjusting for other comprehensive income, the company posted a total comprehensive loss of N22.89bn as against N55.77bn in 2020 representing a decrease of 58.96 per cent in its loss performance.”

The report added, “It is important to state that the decrease in loss after tax is due to the reduction in general and administrative expenses.”

It reported that the Kaduna refinery’s asset base expanded by 952%, from N20.5 billion in 2020 to N195.3 billion as of December 31, 2021.

The Warri Refining and Petrochemical Company Limited reported a total comprehensive loss of N19.63 billion in its fiscal year ending December 31, 2021, down from N44.13 billion in 2020.

The financial statement also revealed that the staff of WRPC was cut by 113 individuals, from 444 in 2020 to 331 in 2021.

The Port Harcourt Refining Company Limited’s financial statement for the fiscal year ending December 31, 2021 revealed that PHRC’s loss, which was moved to what it termed as reserves in 2021, was N26.51 billion.

When compared to the N53.18bn loss recorded in 2020, this represented a reduction in operational loss by the refinery.

For numerous years, Nigeria’s refineries have been idle in terms of crude oil refining, while operators have frequently urged the government to solve this anomaly.

The National President, Petroleum Products Retail Outlets Owners Association, Billy Gillis-Harry, for instance, said PETROAN was ready to partner the Federal Government in developing both modular refineries and the large-scale ones.

He said, “The government must fix refineries and many times we have made it open that we are ready to partner the government in getting these assets running as fast as possible. This will help to stop petrol imports and cut down on subsidies.

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