We cannot but recollect that back in 1980, when we were in distress, the United States of America wanted Nigeria to boycott the Moscow Olympic Games. The President of America also wanted to pacify American oil companies, which had won the trans-Siberian pipeline contracts. They were barred by presidential order. However, the US president wanted to compensate them by bankrolling four new oil refineries in Nigeria, which they would run for twenty-five years and thereafter hand over to Nigeria. They were going to be BOTs [Build, Operate, and Transfer]. I believe that the American companies were Chevron, Mobil, and two others. In any case, Nigeria preferred not to boycott the Olympics, much to the delight of the Russians. On a personal note, I attended the Olympic Games, and I must confess that the Russians delivered a truly magnificent and memorable Olympic Games. There were other lessons too—which time and space would not permit me to share with you on this auspicious occasion. It is a story for another day.
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Also, let me add that the oldest refinery in Nigeria was located in Port Harcourt, and it was jointly owned by Shell and BP.
I recall that back then, when I participated in the audit of the refinery, TAM (Turn Around Maintenance) was not a big deal. It was handled by a mid-level expatriate manager who would typically scribble on a blackboard:
“NOTICE TO ALL STAFF; TURN AROUND MAINTENANCE WILL COMMENCE ON 12TH JUNE AND BE COMPLETED ON 22ND JUNE.”
Now it has become a blockbuster contract involving millions of dollars at frequent intervals.
Perhaps I should add that about forty-five years ago, the then military government decided to build new refineries in addition to the already existing one in Port Harcourt, which could handle only 60,000 barrels of crude oil per day. A Canadian firm was hired to carry out the feasibility report. The consultants recommended four refineries—one in Lagos (the major market), one in Warri (close to the supply of crude), the third one to be built in Lokoja (a central location between North and South), and the fourth one to be a second refinery in Port Harcourt (as an export terminal).
Apparently, when the report was tabled at the Supreme Military Council, the Chief of General Staff objected to all the refineries being located in the South. He insisted that at least one of the refineries should be located in the North. That is how Kaduna Refinery emerged regardless of the huge distance from the oil-producing area. In any case, it was designed to handle heavy crude oil, which would have to be imported. Besides, the pipelines between Kaduna and the oil-producing areas have been massively vandalised.
My recollection is that the Warri Refinery was built by an Italian company, Snamprogetti, while the Kaduna Refinery was built by a Japanese company, Chiyoda. What was remarkable was that the Japanese took about four years to complete the job and trained about one hundred Nigerian engineers. Twenty years later, when the refinery broke down, I was part of the delegation dispatched to Japan to invite the Japanese to come to our rescue.
However, there was a lesson to be learnt. The Japanese summoned the engineers who had worked on the Kaduna Refinery. Out of the twenty-six engineers, twenty-five were still in the employment of Chiyoda. One of them had died. Alas, the Japanese were shocked to learn that only one or two of the Nigerian engineers they had trained both in Nigeria and Japan were still in the employment of NNPC (Nigerian National Petroleum Corporation).
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It is worth remembering that when we export crude oil, we earn maybe U.S.$80 per barrel. However, when it is refined, the value added (petroleum motor spirit, jet fuel, and other by-products) would fetch US $1,500. Hence, notionally we lose U.S.$1,420 on every barrel of oil that we are unable to refine.
For the benefit of the younger generation, we should share with them that for several decades the United States of America was a huge buyer of crude from Nigeria. However, when President Shehu Shagari visited the US in 1982, he dropped a bombshell while being welcomed by the American president:
“We shall use our oil as a weapon against America.”
Chief Tayo Akpata was one of those who wrote the speech. He was aghast. The threat was not in the speech he wrote!! What a gaffe. In any case, the reaction by America was swift and lethal. The American president, Mr Ronald Reagan, immediately ordered American companies to commence drilling for oil within the United States of America. They no longer wanted to buy crude oil from Nigeria.
