The Nigerian National Petroleum Company Limited has stopped using crude oil as payment for refinery rehabilitation projects, Group Chief Executive Officer Bashir Ojulari has disclosed.

Ojulari said the change reflects a new approach adopted by the national oil company in managing payments for the rehabilitation of Nigeria’s refineries.

Under the previous arrangement, crude oil could be used as part of the payment structure for contractors involved in refinery repair and rehabilitation projects.

However, the NNPCL has now moved away from the crude-for-repairs model, with the company adopting a different payment arrangement for the work being carried out on its refinery assets.

The change comes as Nigeria seeks to restore its state-owned refineries and increase domestic petroleum refining capacity.

The NNPCL has been overseeing rehabilitation efforts at the Port Harcourt, Warri and Kaduna refineries as the country works to reduce its reliance on imported refined petroleum products.

Ojulari’s disclosure comes amid increased attention on the cost and financing of refinery rehabilitation, particularly as Nigeria expands its domestic refining capacity.

The Dangote Petroleum Refinery has also become a major supplier of refined petroleum products in the Nigerian market, while other private and modular refineries are working to increase their output.

The NNPCL has said restoring the country’s refineries remains important to strengthening domestic refining and improving the security of petroleum product supply.

The company’s decision to discontinue crude-based payment arrangements means its refinery rehabilitation contracts will no longer be settled through the direct allocation of crude oil to contractors.