Warri, Port Harcourt: Coming Alive As Refineries Resume Operations

By Kelvin Ebiri, Port Harcourt and Chido Okafor, Warri |   16 August 2015   |   12:00 am  

WITH the complete turn around of the Warri refinery for production of petroleum products, residents are of the opinion that the oil rich city might regain its commercial status again. They are expecting the return of ancillary businesses, which went underground because of the closure of the refinery.

Hope for better future was expressed amidst reports that Port Harcourt refinery, which resumed production of petroleum last week may attain 70 percent capacity by the end of September.

Although Warri is regarded as an oil city and has over the years played host to several major oil producing firms like Shell and Chevron, as well as many oil services firms, the city, like most critics observe, does not look like her global sisters that had been transformed into top notch economic hubs and metropolis.

Warri, a sprawling middle ranked city, was hard hit in 2010 when Shell, one of the biggest employer of labour in the area decided to sell off its assets and pulled out of Delta and Bayelsa States, allegedly due to steady production drops occasioned by frequent communal crises, throwing hundreds of its workforce into the labour market.

The comatose of Delta Steel Company (DSC), another key employer, which was acquired by Global Steel in 2007 and ran by the Indians till 2012, equally threw several hundreds more into the murky unemployment market.

A lot of job seekers, therefore, turned to the Warri Refining and Petrochemical Company (WRPC) and the Warri Ports, which had operated at a dismal level until the refinery came back on stream two weeks ago, and reportedly doing 50 percent capacity, producing about 4,612,500 litres of petrol per day.

The Warri Ports and Warri refinery were said to be the biggest creators of job in the locality between 1978 and 1995. But, the lack of patronage of the Warri port over the years by importers had led to the decline of activities thereby leaving the Warri refinery and other oil firms to shoulder the burden of creating jobs for several hundreds of individuals in the area.

“We find ourselves in the midst of oil wells, but there are no jobs. It is a terrible situation. We have oil companies around us, but our children are not employed. When they finished from the university, they go to Lagos, Abuja and Port Harcourt to look for jobs. Companies like the Warri refinery and other NNPC subsidiaries that are supposed to carter to the needs of the host communities lock their gates perpetually and give contracts to foreigners, saying we lack the expertise to work there. It is a terrible situation. Warri is dying and something drastic must be down. Warri Port is down, DSC is not working, Shell has divested and gone. We don’t know what is going on in Chevron. It is so sad,” Chief Robinson Omonuwa, a former contractor lamented.

The National Coordinator of Niger Delta Peace Coalition (NDPC), Mr. Zik Gbemre, said it is a good development that the Warri Refining and Petrochemical Company is now working and is projected to hit 80 per cent of its installed capacity, 125,000 bpd, after nine months of “phased rehabilitation conducted by its in-house engineers and technicians.

“We consider this a huge and welcome development. There is nothing that propels any society to development than it having the ability to refine its raw materials to satisfy domestic needs and meet export purposes. The economic and social benefits are too numerous to mention. The oil city of Warri and environs will soon be back to life because of this development.

“If all our refineries are working, like the Warri Refinery is now doing, and we have more than enough products to satisfy domestic demands, the issue of subsidy will not arise. This will also provide more employment opportunities and business for our people. Kerosene will now be easily available for our women for their cooking. In fact, as our refineries are working, it will automatically boost the economy and improve the living standards of our people to a ‘reasonable’ extent. The Warri Deport has practically come back to life with all manner of business activities and petty trading just because the Warri refinery is working,” Gbemre said.

Similarly, an independent oil marketer, Mr Frank Shagulo, said the refinery would bring back to live some local businesses that were dependent on the it, like local establishments that source spare parts as well as carryout some maintenance services at the refinery.

“ How come the government allowed the refineries to fall apart before they fix them? It shows they were not even interested in developing Nigeria and improving life for Nigerians. We have abundant crude oil and gas reserve yet; we buy fuel, diesel and kerosene at expensive prices. A lot of small scale factories that were fabricating parts for the refineries closed shop and it is not good for a nation.”

WRPC has been in operation since 1978, when it was first commissioned, but was upgraded in 1987. The main business of WRPC is to process crude oil into Petroleum and Petrochemical products. Since then it has played its little role in boosting the economic activities of Delta State, where it is located and those of neighboring states.

Before private concerns were allowed to own depots, the refinery was the hub of economic activities in Warri and environ. A lot of petroleum product marketers from different parts of the country literary besieged the PPMC loading depot at the Warri refinery to buy products. This in turn created businesses to service the demand of the marketers. Several banks with local employees opened their offices within the refinery to mop up the steady cash that accrued from petroleum products transactions. Petroleum marketers opened offices from where they carried out transactions. A plethora of small businesses including restaurants, cloth sellers, network outlets, herb hawkers, established a strong presence there.

Also, local contractors who provided different services to the WRPC, including the supply of spare parts, surfaced.
It was usually a beehive of activities at the loading depot as marketers moved from one office to another in a bid to get relevant clearances for loading of products.

This was the usual scenario at the refinery, until the emergence of private depots. This pulled a large volume of marketers out of the refinery area to source product at the private depots, which also created job opportunities for host communities.

Sadly, Warri has only benefited from few of the many products produced by the WRPC because the oil city does not have industries that use the other industrial materials produced by the refinery. Apart from petrol, kerosene and diesel, the refinery produces other byproducts like Unstanched LPG for aerosol purposes; Straight-run Gasoline (SRG): (solvent to vegetable oil refiners). Also, the Polypropylene plant of the Warri refinery produces Homopolymer for making yarn, furniture, crates, Pipes, containers, battery cases, pumpers, dash-board, among others.

The Carbon Black Plant, which produces 18,000 metric ton per year, has the potential to produce 15 different grades of carbon black product used as a reinforcing agent in the manufacturing of tyres.

The dearth of industries that use these products in Warri area means that companies from Lagos, Anambra, Kaduna and other parts of the country come to Warri to buy these products.

MEANWHILE, the Port Harcourt refinery might attain 70 percent of its production capacity of 210,000 barrels per day before the end of September 2015.

The refinery, which is currently undergoing its first major rehabilitation in well over ten years, is projected to attain over 90 percent production of petroleum products by the first quarter of 2015 if current rehabilitation work is sustained.

A source at the refinery, who pleaded anonymity told The Guardian that the refinery is not operating at its fully installed capacity because the engineers working on the plant have recommended gradual energizing of the various units to avoid a sudden breakdown.

He explained that though the refinery has commenced production of refined petroleum products, there could be further delays in its total Turn Around Maintenance for it to attain optimal production capacity.

According to him, the failure to carry regular turn around maintenance over the years had left the refinery in a deplorable condition that now requires gradual energizing of the components units of the plant. He expressed optimism that barring any disruption of the ongoing rehabilitation, the refinery should be producing at 70 percent installed capacity by the end of September.

“Presently, the refinery is producing at 60 percent of the installed 210,000 barrels per day, which should yield at least 5 million litres of petroleum products.

While the old Port Harcourt refinery is said to have the capacity to produce about 60,000 barrels a day from its crude distillation unit, catalytic reforming unit and Liquefied Petroleum Gas units as well as utility unit, the new refinery has to refine 150,000 barrels of crude a day. It has crude distillation unit, catalytic reforming unit, the fluid catalytic cracking unit and the hydrofluoric (HF) Alkylation units with a total refining capacity of 210,000 barrels a day.

The source explained that work on the Fluid Catalytic Cracking Unit (FCCU), which is the most critical component of the refinery would soon be completed, adding that it might be commissioned next week.

“The FCCU reputed to be the largest gasoline producing unit in Africa, is the core heart of the refinery and when this unit is fully energized, the refinery will be gradually moving towards full production of petroleum products. We are very confident that once the FCCU comes on stream, we will achieve at least 70 percent production of installed capacity by September ending and by the first quarter of 2016, we will attain well over 90 percent production. But like I said, the refinery has to be energized gradually to avoid shutdown,” he added.

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