Nigeria’s state-owned oil company, NNPC, is in discussions with a Chinese firm over one of its refineries, the company’s chief executive said on Wednesday.
NNPC CEO Bayo Ojulari explained that the company is looking to bring in experienced refinery operators as equity partners to revive its four refineries, which have suffered years of losses and poor performance.
Ojulari said an internal review conducted shortly after he assumed office last April revealed that the refineries were operating at significant losses.
According to him, operating costs were extremely high, spending on contractors was heavy, and processing volumes remained low.
He said NNPC’s board has now approved a new strategy focused on partnering with refinery operators who have proven expertise, rather than relying on contractors.
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He added that discussions with potential partners are already at an advanced stage. “I’m just coming from a meeting with one of the potential investors,” Ojulari said, declining to name the company.
“They are going to the refinery tomorrow to inspect. It’s a Chinese company that has one of the biggest petrochemical plants in China.”
Nigeria has long struggled to rehabilitate its aging refineries, which have consistently operated far below capacity. This has forced Africa’s largest crude oil producer to depend heavily on imported fuel.
The government believes new partnerships could help change that situation. Ojulari said the refineries have been shut down to allow time to properly assess options for restoring them, noting that the start-up of the Dangote Refinery has provided some “breathing space” for domestic fuel supply.
He stressed that NNPC is not selling the refineries outright but plans to give up a portion of their equity to partners so the plants can finance their operations independently.
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Image Credit: Reuters
