The Nigerian National Petroleum Company Limited (NNPC Ltd) is changing the way it rehabilitates its refineries, with the company now seeking technical partners that will have ownership stakes and a financial interest in their performance.
NNPC Group Chief Executive Officer, Bayo Ojulari, disclosed this on Tuesday at the company’s media parley in Abuja.
He said the decision followed lessons from previous rehabilitation projects, where contractors were paid to carry out repairs but had no continuing financial interest in how the refineries performed after the work was completed.
According to Ojulari, the new arrangement is intended to make the refineries commercially sustainable by ensuring that technical partners are directly invested in their operations and results.
He said prospective partners would be expected to have proven experience operating refineries or petrochemical facilities, alongside the technical capacity needed to support the plants.
“What we want going forward is to have a refinery that is self-sustaining, that is profitable, and is sustainable,” Ojulari said.
NNPC currently operates three government-owned refineries: the Port Harcourt Refining Company in Rivers State, the Warri Refining and Petrochemicals Company in Delta State, and the Kaduna Refining and Petrochemical Company in Kaduna State.
Chinese firms assess Port Harcourt, Warri refineries
Ojulari also provided an update on discussions with Chinese investors regarding the Port Harcourt and Warri refineries.
NNPC had signed a memorandum of understanding with two Chinese companies on May 4 to explore their involvement in completing and operating the two facilities.
He said Chinese engineers had spent three months carrying out due diligence on both refineries as part of the assessment process.
However, NNPC has not reached a final agreement with the investors. The Chinese team is expected to submit its findings and proposal, after which commercial and technical negotiations will commence.
Ojulari said there were indications that the investors remained interested in both the Port Harcourt and Warri facilities.
The Kaduna refinery has not yet entered the same process, although NNPC plans to pursue a similar technical equity partnership for the facility.
The NNPC chief added that refinery profit margins are relatively narrow, making high production volumes, operational efficiency and petrochemical output important to the long-term viability of the facilities.
He said the company is also considering newer technologies and opportunities in petrochemicals as part of efforts to make the refineries more sustainable.
