The Nigerian National Petroleum Company (NNPC) Limited is considering the possibility of divesting its state-owned refineries, following years of costly repair efforts that have made limited progress.
Bayo Ojulari, the Group Chief Executive Officer of NNPC, said the company is currently reviewing its refinery strategy and expects to complete the review before the end of the year.
Speaking to Bloomberg at the 9th OPEC International Seminar in Vienna, Ojulari acknowledged the challenges facing the refineries.
“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,” he added.
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His comments follow renewed scrutiny of the Port Harcourt refinery, which NNPC announced had begun crude oil processing on November 26, 2024, but was shut down again in May for maintenance.
Over the years, several billions of dollars have been spent trying to revive 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 approved $1.48 billion for phased repairs of the Warri and Kaduna refineries, with timelines of 21, 23, and 33 months respectively.
Despite these significant investments, the refineries are still not producing refined products.
Aliko Dangote, Africa’s richest man and owner of the world’s largest single-train refinery, has recently expressed doubt about the viability of the Port Harcourt, Warri, and Kaduna refineries, despite an estimated $18 billion reportedly spent on their rehabilitation over time.
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Image Credit: Business Insider Africa
