The former Exxon-Mobil man is in the habit of mouthing often bloated and bogus projections which only exist in the fictitious world of Kachikwunomics. The minister often accused of indulging in “big talk” and unaware of ground realities by industry experts. In a bizarre move Kachikwu is seeking help from IOC’s including TOTAL Oil indicted for the worst turn around maintenance project in the history of Nigeria, conducted at the Kaduna refinery in 1998. Built at N504m, the refinery came on stream in 1980. It is Nigeria’s only inland-located refinery; located in the northern city of Kaduna, well away from the other three refineries, which are located in close proximity in the Niger Delta oil and gas producing area of the country. It is linked by pipeline to the source of its local and imported crude oils feedstock from the Escravos terminal and with the other refineries and storage depots by pipeline network system.
After suffering from years of neglect, the Kaduna refinery was closed down in late July 1997 due to an accident. However, late in August 1997, Total oil company won a three-year contract worth about $200m to repair the plant, partly upgrade some of its units, and operate it. It was agreed that, after the three-year period, if by then local fuel prices had been raised to international market levels, Total may buy equity in the refinery. The French Oil company’s activities at the Kaduna refinery was abysmal, according to expert assessment. The Obasanjo’s administration through the NNPC dismissed Total as a contractor in May 1999. Speaking to journalists on Friday, Lewis Linden a former chief Economist of one of the IOC’s said, consolidation is needed in the oil refining sector, indicating more tough decisions ahead for an industry beset by poor margins. Major oil companies have reported billions of dollars of losses from their refining business. “To put it bluntly and shortly, there will have to be some consolidation in the refining industry.” Oil refiners faced double blow in 2015 when world oil prices fell because of recession just as a host of new refining projects planned during the boom years came on stream, squeezing margins.
This magazine gathered that Shell in recent years divest 15 % of its global refining. Chevron who is also part of the IOC’s Kachikwu is discussing with to take over the refineries in recent years has also closed down some of its refineries. Investigations by shows that global refining utilization rates has been falling and oil demand in developed OECD countries has peaked, according to forecasts. Findings by Global News also revealed that International Oil Companies are seeking acquisitions in Nigeria and Asian countries because refineries in developed markets
are presently at a disadvantage compared with those in emerging markets like Nigeria, where governments often subsidies fuel prices.
The call by Kachikwu and his co travellers for full privatisation of the downstream sector of the oil industry, which includes the sale of the refineries, is being bandied in official circles as panacea for the lingering fuel crises. Industry watchers claimed that the minister’s comments and actions are uncalled for, unnecessary and a mere diversion from the failure of the ministry to address the problem of scarcity of petroleum products currently being experienced in the country.