NNPC in Talks With Chinese Firm to Revive Loss-Making Refineries

NNPC is in talks with a Chinese company as part of efforts to revive its underperforming refineries by bringing in experienced operators as equity partners. An internal review revealed heavy losses, high operating costs and low output, prompting a shift away from contractors. While the refineries are temporarily shut for assessment, NNPC says it is not selling them but plans to share equity to enable self-financing, with the Dangote Refinery helping to cushion domestic fuel supply in the meantime.

Nigeria’s state-owned oil company, the Nigerian National Petroleum Company (NNPC), has entered discussions with a Chinese firm over one of its refineries, according to its chief executive, who disclosed the development on Wednesday. The talks form part of broader efforts by the company to address the longstanding operational and financial challenges facing its refining assets.
NNPC Group Chief Executive Officer, Bayo Ojulari, said the company is seeking experienced refinery operators as equity partners to help revive its four refineries, which have recorded years of losses and poor performance. He explained that shortly after he assumed office in April last year, an internal review was conducted to assess the condition and viability of the refineries. The findings, he said, showed that the plants were operating at huge losses, driven by high operating costs, excessive spending on contractors, and very low processing volumes.
Ojulari noted that, based on the outcome of the review, NNPC’s board approved a shift in strategy. Rather than continuing to rely on contractors, the company decided to pursue partnerships with refinery operators that have proven technical expertise and a strong track record in managing large-scale refining operations. He added that NNPC is already in advanced discussions with several potential investors under this new approach.
Providing insight into the ongoing talks, Ojulari said he had just concluded a meeting with one of the prospective partners, though he declined to name the company. He disclosed that representatives of the investor were scheduled to visit the refinery the following day for an inspection. According to him, the firm involved is a Chinese company that owns and operates one of the largest petrochemical plants in China.
Nigeria has faced persistent difficulties in rehabilitating its ageing refineries, which have for years operated far below their installed capacity. This has forced Africa’s largest crude oil producer to rely heavily on imported refined petroleum products to meet domestic demand, placing pressure on foreign exchange reserves and fuel supply chains. The federal government believes that bringing in credible and experienced partners could help reverse this trend and improve the performance of the country’s refining sector.
Ojulari also revealed that the refineries have been temporarily shut down to create space for a comprehensive assessment of the best options for restoring them to efficient operation. He said this pause has coincided with the commencement of operations at the Dangote Refinery, which has provided some “breathing space” for domestic fuel supply while NNPC reconsiders the future of its own plants.
He stressed that NNPC has no plans to sell off the refineries. Instead, the company intends to relinquish a portion of their equity to strategic partners, a move designed to allow the facilities to generate sufficient funding for their own operations and maintenance, while ensuring long-term sustainability and improved efficiency.