Citing the barrage of criticisms that have since trailed its acquisition of the Port Harcourt Refinery, Bluestar Oil Services Limited Consortium, owned by Aliko Dangote�s Equity Energy Resources, Femi Otedola�s Zenon Oil, and Transnational Corporation yesterday resolved to vacate its interest in the 210,000 bpd refinery for 12 months, effective from July 17.
The consortium is also demanding the refund of $721 million which it paid for the acquisition of 51 per cent Federal Government equity in the nation�s biggest refinery.
In a letter to the Bureau of Public Enterprises (BPE), and made available to THISDAY yesterday, the consortium maintained that it emerged the preferred bidder in the acquisition of the Port Harcourt, after it paid $561 million.
The group said it decided to pull out from the deal following widespread criticisms by the organised labour and the recent campaign by the Nigerian National Petroleum Corpor-ation (NNPC), that it is capable of managing the ailing refinery which operational capacity has dropped to below 40 per cent.
The consortium, however, said in the event that NNPC failed to live up to its pledge at the expiration of the 12 months, the group would re-assume its interest in the plant at a renegotiated price.
According to the letter to BPE, dated July 17, and titled, Re: Sale of 51 Per cent Federal Government Equity in Port Harcourt Refinery, Bluestar stated that �The current campaign by organised labour and the NNPC that it can run the refinery more efficiently, contrary to the published data that showed an average of 35 per cent capacity utilisation over a period between 1999-2005 suggest that Federal Government�s decision to involve private sector in the ownership and management of the refinery is ill-advised given the events that unfolded since the privatisation.�
�The consortium hereby conditionally vacates its interest in the refinery for 12 months effective from the date of the letter (July 17) to enable the NNPC to; deliver on its commitment to operate the refinery at full capacity without government funding, to eliminate importation of petroleum products and to eliminate queues at filling stations nation-wide.
�In the event this commitment was not met by the end of 12 months, Bluestar will reassure its interest at a re-negotiated price to reflect the state of the asset. Bluestar also in the meantime, demand a refund of $721 million paid for the refinery,� the statement reads.
However, an official at the BPE confirmed that the consortium had applied to withdraw its equity interest in the refinery but declined further comments on the ground that only the Director-General, Mrs. Irene Chigbue, whom he said was in the meeting at the time THISDAY called, was competent to give detailed information about the issue.
At the bid round which took place in Abuja, Bluestar Oil Services Limited Consortium, a consortium of indigenous companies comprising Dangote Group, Zenon Oil, Transnational Corporation (Transcorp) and Rivers State Government had emerged the preferred bidder/core investor for the nation�s largest plant, after it (consortium) submitted a bid of $561 million (N71.808 billion) for 51 per cent of Federal Government�s equity in the ailing crude oil refining company.
Bluestar Consortium had made an on-the spot payment of $300 million, representing more than 50 per cent of the bid price for the company, in line with the payment mechanism of the BPE for the transaction.
The consortium was expected to pay the 50 per cent balance of the purchase consideration into a designated account by 4pm of the seventh working day immediately following the official notification of a successful bid. This was reportedly done.
Oando Plc and Refinee Petroplus Nigeria Limited also participated as bidders at the event which was conducted at the Transcorp Hilton Hotel, Abuja, but were, however, disqualified for their failure to include a draft of 50 per cent of their bid prices in the envelopes submitted to BPE.
Chairman of the Bluestar Oil Services Limited Consortium and President, Dangote Group of Companies, Alhaji Aliko Dangote, had lauded the deal noting that Nigerian entrepreneurs must take the lead in the nation�s march towards greatness. He also disclosed plans by the Consortium to expand the refinery, adding that before the Consortium bought the Port Harcourt Refinery, it had plans of building a refinery of 300,000 barrels per day in Lagos.
He also said the consortium would inject $200 million into the first phase of the project while the second phase would gulp about $3 billion
�Really it is very criminal to be importing petroleum products of $9 billion when we are a producer and that is the main reason why we are here.
�I feel very great. There is nobody that will come and grow our own economy more than us and that is why we are heavily investing because we believe it is our own economy, we believe in the country and we believe in the economic policy of Nigeria. That’s why we are here to make sure that we bid and win,� Dangote had said.
But the sale of the refinery and other government�s assets at the tail end of former President Olusegun Obasanjo�s administration have continued to attract criticisms at different quarters and culminated in the four-days nationwide strike embarked upon by labour unions in June.
The decision to call off the industrial action on June 23 was sequel to the intervention by President Yar�Adua, who had assured that an expert committee would be set up by the Federal Government to look into pricing mechanism in the oil sector and to examine the privatisation and concession, especially the recent sale of government equity in the refineries.
A fortnight ago, the President had restated his resolve to revisit the sale of the refinery, even as the upper legislative house recently declared that the plant was under priced.
Only last Thursday, the NNPC and the Department of Petroleum Resources (DPR) had called for the cancellation of the sale of both the Port Harcourt and Kaduna Refineries, asserting that the corporation had the capability of running them.
Specifically, the Group Executive Director (GED) Refineries, Mr. Abubakar Lawal Yar�Adua, who appeared before the Senate public hearing on issues that led to the recent nationwide labour strike, had stated that if giving the necessary assistance, the NNPC had the capability to run the refineries efficiently, claiming that the corporation had planned to effect certain repairs on the plants, which would have made them efficient but was stopped by the Obasanjo administration which preferred to sell them off.
He argued that the solution to the nation�s petroleum shortages would not be found in the selling of the refineries, but in conducting proper turn-around maintenance on them as well as building new ones.
On his part, DPR Director, Mr. Tony Chukwueke said the nation had not exploited all the models that could ensure that the refineries worked optimally and canvassed that Nigeria could invite foreign technical partners to partner to run the refineries for it or involve foreign expatriates to conduct the repairs whenever the need arises.
Meanwhile, fresh facts have emerged as to the reason why Transcorp withdrew from the bid to acquire the Port Harcourt Refining Company (PHRC).
THISDAY checks revealed that the business conglomerate took the decision to quit the process having been enmeshed in controversies arising from its previous acquisition of strategic national assets such as NITEL, NICON Hilton Hotel and some oil blocks.
�We saw it coming based on our past experiences and as a truly Nigerian company we resolved to avoid investing in businesses that will make majority of Nigerians to raise eyebrows,� a top official of the company said.
The nation�s four refineries, with a name-plate capacity of refining 445,000 barrels per day of crude, were established about 30 years ago. But a barrage of corruption, poor management, sabotage and lack of the mandatory turnaround maintenance (TAM) every two years, have made all the four refineries inefficient, thereby operating at about 40 per cent of full capacity, at best of times.
Jul192007