Nigeria’s NNPC Considers Refinery Sale Despite Billions Spent on Repairs
The Nigerian National Petroleum Company (NNPC) Limited is weighing the option of divesting its state-owned refineries, following years of expensive rehabilitation efforts that have produced little progress.
Speaking to Bloomberg on the sidelines of the 9th OPEC International Seminar in Vienna, the Group Chief Executive Officer of NNPCL, Bayo Ojulari, said the NNPC is currently reassessing its refinery strategy, with plans to complete the review by the end of the year.
“So refineries, we made quite a lot of investment over the last several years and brought in a lot of technologies. We’ve been challenged,” he said.
“Some of those technologies have not worked as we expected so far. But also, as you know, when you’re refining a very old refinery that has been abandoned for some time, what we’re finding is that it’s becoming a little bit more complicated,”
“So we’re reviewing all our refinery strategies now. We hope before the end of the year, we’ll be able to conclude that review. That review may lead to us doing things slightly differently.”
His comments come amid renewed scrutiny of the Port Harcourt refinery, which NNPC announced had begun crude oil processing on November 26, 2024. However, the plant was shut down again in May for maintenance.
Several billions of dollars have been pumped into reviving Nigeria’s state-owned refineries. In March 2021, the federal government approved $1.5 billion for the rehabilitation of the Port Harcourt refinery.
Later that year, the Federal Executive Council (FEC) also approved $1.48 billion for the phased rehabilitation of the Warri and Kaduna refineries, with timelines of 21, 23, and 33 months respectively. Yet, despite the heavy investment, the facilities are still not producing any refined products.
Africa’s richest man and owner of the world’s largest single-train refinery, Aliko Dangote, recently expressed scepticism about the viability of Nigeria’s state-owned refineries in Port Harcourt, Warri, and Kaduna, despite an estimated $18 billion reportedly spent on their rehabilitation over the years.
