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DORMANT INDENI OIL REFINERY LOSES K250M INCOME

By OLIVER SAMBOKO

AS at December 2020, Indeni Oil Refinery had lost annual revenue of K250, 017, 335 due to non-operationalisation of the bituminous plant at the Ndola plant.

This is according to the 2020 report released by the Auditor General’s office.

The objective of the project was to enable Indeni to produce bitumen for road constructions in the country.

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The plant has a capacity to produce 36, 500mt of bitumen per year. However, as at December 31, 2020, the plant was not operational. Consequently, the company lost annual revenue of K250, 017, 335 at a price of K6, 849.79/Mt as at September 30, 2020.

The report revealed that on March 15, 2010, the Ministry of Energy and Water Development engaged Dalbit Petroleum Limited of Kenya to rehabilitate the Bitumen Plant at Indeni at a contract sum of K94, 837, 872,195 with an expected commencement date of October 17, 2011 and completion date of June 2012.

The AG report revealed that as at December 31, 2014, works had been completed and the whole contract amount had been paid, but despite the completion, the plant has not been fully operational.  

The report revealed that the plant is not in operation due to lack of suitable feedstock as not all crude oil produces bitumen.

However, it was not clear why management could not procure the suitable feedstock.

The report also revealed discrepancies in metered stockfeed between Tazama Pipelines and Indeni Refinery.

The report said a review of the monthly refinery material processing reports pertaining to crude oil from Tazama Pipelines to Indeni refinery for the period under review revealed that there were discrepancies between the quantities dispatched by Tazama Pipelines and those received by Indeni.

In particular, records from Indeni showed that 1, 855, 930mt of stock was received while records from Tazama Pipelines showed that stock totalling 1, 869, 229mt was dispatched resulting in a discrepancy of 14, 299mt.

Consequently, Indeni lost K9, 415, 608 in processing fees.

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