The Nigerian National Petroleum Company Limited (NNPC Ltd) has announced a major shift in how it will finance the Port Harcourt and Warri refineries, saying the facilities will no longer rely on loans secured against crude oil production.
Instead, the state-owned energy company plans to adopt a commercial funding model that links financing to the operational performance and profitability of the refineries.
Speaking at the Nigeria Oil and Gas Conference in Abuja, NNPC Group Chief Executive Officer, Bayo Ojulari, said the company’s objective is to ensure the refineries become financially independent businesses capable of attracting investment without depending on government-backed borrowing.
According to him, future funding will be based on how efficiently the refineries operate rather than on projected crude oil output.
Ojulari explained that the company is moving away from financing arrangements that burden the refineries with debt unrelated to their productivity. He stressed that the long-term goal is to create facilities that can generate sufficient value to secure their own financing while reducing dependence on external contractors.
He also disclosed that NNPC has reviewed its investment portfolio, removing projects that lacked clear financing plans or realistic prospects for profitability.
As part of the new approach, Ojulari pointed to the financing structure adopted for the Ajaokuta-Kaduna-Kano (AKK) gas pipeline, where funding is tied to the project’s expected throughput instead of crude oil revenues. He said the same commercial principles would guide future refinery operations.
The NNPC boss added that achieving sustainable refinery operations would require strategic partnerships spanning engineering, logistics, technology, marketing and energy transition initiatives.
The announcement comes weeks after NNPC signed a Memorandum of Understanding with China’s Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Company Ltd to explore an equity partnership for the Port Harcourt and Warri refineries.
Under the proposed arrangement, the Chinese firms could acquire a majority stake in the refineries, subject to technical, financial, commercial and legal due diligence. The partnership is expected to support the completion of rehabilitation works, expand refining capacity, improve operations and maintenance, and integrate petrochemical and gas-based industrial projects around the facilities.
Ojulari has repeatedly maintained that the objective is not simply to complete rehabilitation projects but to transform Nigeria’s state-owned refineries into profitable businesses capable of sustaining themselves over the long term.
While doubts remain over the future of the country’s ageing refineries, the NNPC chief expressed confidence that the Port Harcourt, Warri and Kaduna plants can be restored to commercial viability under the new business model.
