NNPCL told to stop committing state resources to refineries’ rehabilitation

NECA expresses concern over new refinery deal

The Nigerian National Petroleum Company Limited (NNPCL) has been urged to stop committing the resources of the state to the rehabilitation of the comatose nation’s refineries.

The advice by the industry’s experts was triggered by last week’s announcement by the NNPCL, informing Nigerians about its new Memorandum of Understanding (MoU) with two Chinese firms:

Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd, for collaboration through a potential Technical Equity Partnership (TEP) in support of the completion and operation of the Port Harcourt and Warri Refineries.

The experts, who spoke with Nigerian Tribune, were opposed to the new deal by the NNPCL, recalling that between 2021 to date, a whopping $3.5billion  has been spent by the authorities to bring moribund Port Harcourt, Warri and Kaduna Refineries back to life without tangible results.

Some of the the experts that frowned at the new deal include the former Director General, Lagos Chamber of Commerce and Industry, Dr. Muda Yusuf; former Chairman, Major Energies Marketers Association of Nigeria, Mr Adetunji Oyebanji and Senior Partner, Olisa Agbakoba Legal, Dr. Olisa Agbakoba, SAN.

They decried continuous wasting of public funds on the comatose refineries by the government/NNPCL.

Yusuf, who doubles as Director/Chief Executive Officer, Centre for the Promotion of Private Enterprise, cautioned NNPCL to be careful in committing additional resources of the state to the rehabilitation of these refineries after several failed attempts.

“Two forms of public funds have been committed to the rehabilitation of these refineries over the years. Also, there are reports that between 2021 to date, an estimated sum of $3.5 billion has been spent for the rehabilitation, and yet the refineries didn’t work.

So, we need to be careful in committing additional resources of the state and NNPCL funds to the rehabilitation of these refineries,” he said.

Yusuf canvassed total privatisation of these refineries to allow whoever buys them to sort out the issues.

Alternatively, he said that government can adopt Public Private Participation (PPP) arrangements, where major part of the equity is sold to the private sector.

 Also, the Nigeria Employers’ Consultative Association (NECA) has questioned the new refinery agreement between the Nigerian National Petroleum Company Limited (NNPCL) and Chinese firms, demanding transparency and accountability.

According to the News Agency of Nigeria (NAN), NECA Director-General, Adewale-Smatt Oyerinde, said this in a statement issued on Sunday in Abuja while reacting to the Memorandum of Understanding (MoU) signed on May 4 for refinery rehabilitation and expansion projects.

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The statement is titled: “Enough of MoU Governance and Failed Revamps on Port Harcourt and Other Refineries.”

He said Nigeria could not afford another failed refinery rehabilitation after spending about $25 billion on turnaround maintenance projects with little measurable results.

According to him, repeated rehabilitation cycles at the Port Harcourt refinery had failed to deliver sustainable refining output in spite of huge public investments over the years.

“It will be unpatriotic to endorse another opaque refinery deal while questions surrounding past spending and failed rehabilitation projects remain unresolved.

“Nigeria cannot continue spending billions of dollars on refinery turnaround maintenance without sustainable refining output or measurable economic value.

“NNPCL must rebuild public trust through transparency, accountability and a clear business model capable of ending repeated refinery rehabilitation failures,” he said.

According to Oyerinde, Nigerians deserve clear explanations on previous spending, audit outcomes and safeguards against delays, cost overruns and repeated operational failures.

He urged NNPCL to disclose details of the proposed technical partnerships, local content plans and technology transfer arrangements under the agreement.

Oyerinde said businesses had suffered decades of energy insecurity through rising production costs, fuel import dependence and job losses linked to dysfunctional refineries.

The NECA boss reiterated calls for privatisation or concession of the refineries, insisting governance reforms must precede further rehabilitation projects.

He said the association supported refinery revamp efforts only under transparent, accountable and commercially sustainable arrangements capable of restoring public confidence.

“Possibly, the majority of the equity so that the NNPC/government can hold minority shareholding.

You can replicate the NLNG model in managing those refineries because you cannot continue with a model where a government enterprise, even though NNPC has become a limited liability company, but government still has a big stake in it. With this kind of framework, it’s difficult to expect maximum efficiency.

“Whatever model we came up with should be such that is purely private – sector led, something that will minimise political interference, minimise bureaucracy or minimise interference from bureaucracy.

“We should stop committing the resources of state into these refineries. We have suffered enough losses already. You can’t be throwing good money after bad things, “  Yusuf said.

Olisa Agbakoba did not mine words, saying that the refineries are dead, advising NNPCL to stop wasting money on them,.

He raised a poser about $1.7 billion spent on Port Harcourt refinery’s rehabilitation.

The senior lawyer said: “After they did inject and inject and inject funds, it collapsed.

“The refineries are dead. They want to repair refineries that are dead despite the fact that  we have spent a lot of money fixing that in the past. It’s that opacity that I’m talking about. There’s no accountability. Is it because they have the funds? In fact, I don’t even know what the NNPC is!  It’s a regulator, it’s an operator. What exactly is this NNPC?”

Oyebanji said it will certainly be very difficult to get the refineries back on stream going by the years of abandonment. .

“For one, technology has changed. Secondly, they have not worked for so long and finally,  if they even work, can they produce products at the current specifications? So in my opinion, it will be difficult to get them up and running again,” he said

Oyebanji urged Nigerians to maintain wait and see, game, suggesting that the only option would be to find competent partner to operate the refinery.

Meanwhile, the Lecturer in Energy Marketing at Ignatius Ajuru University of Education, Dr. Joseph Obele,  has described the growing opposition against the refinery partnership deal involving Chinese investors as politically motivated, alleging that many of the critics are opponents of President Bola Ahmed Tinubu’s economic reforms and supporters of monopoly in Nigeria’s downstream petroleum sector.

He stated this while reacting to recent comments made by former President of the Organised Private Sector of Nigeria (OPSN), Dele Oye.

Obele said while constructive criticism is healthy in a democracy, outright opposition to new refinery investments without allowing the process to mature could discourage foreign direct investment and slow Nigeria’s industrial progress.

According to Obele, the proposed partnership with Chinese firms is aimed at expanding Nigeria’s refining capacity, creating jobs, attracting foreign direct investment, boosting technology transfer, and strengthening the nation’s energy security.

He noted that countries seeking industrial growth and economic transformation cannot afford to reject foreign investments capable of reviving critical sectors such as refining, petrochemicals, and energy infrastructure.

Obele argued that some individuals and groups attacking the agreement are uncomfortable with the opening up of the sector to broader participation because they have benefited for years from monopoly, import dependency, and limited competition within the petroleum industry.

He further stated that President Tinubu’s administration has continued to encourage international partnerships and private sector investments as part of efforts to reposition Nigeria’s economy and end decades of inefficiency in the oil and gas sector.

According to him, the entry of additional refinery investors into Nigeria will help stabilize fuel supply, reduce pressure on foreign exchange, encourage healthy competition, and ultimately lower the cost of petroleum products for consumers.

Obele stated that the partnership would trigger stronger competition in Nigeria’s downstream petroleum sector and dismantle every form of monopoly that has negatively affected consumers over the years.

He explained that once competition fully sets in, consumers of petroleum products will begin to enjoy better value, improved product availability, and more affordable prices across the country.

The energy expert acknowledged concerns raised about technical competence and transparency but maintained that such issues should be addressed through due regulatory processes, detailed negotiations, performance benchmarks, and proper monitoring rather than public campaigns capable of undermining investor confidence.

Obele who is a member of the refinery host community also revealed that many host community members have welcomed the refinery partnership initiative, stressing that Alesa Eleme community as the core host community to Port Harcourt Refinery, has complained of neglect despite over 50 years of operations by the Nigerian National Petroleum Company Limited (NNPC Ltd.)⁠

He stated that his community members believe the new investment could bring meaningful development, employment opportunities, infrastructure, skills acquisition, and improved economic activities that were lacking for decades.

According to him, stakeholders across the energy sector have described the development as a welcome initiative capable of boosting investor confidence and strengthening the economic reform agenda of President Bola Ahmed Tinubu.

He added that stakeholders and host communities are already looking forward to receiving the investors and are prepared to provide a peaceful, hospitable, and supportive working environment to ensure the success of the project.

He stressed that Nigeria, as Africa’s leading oil-producing nation, should not depend heavily on imported refined products when there are opportunities to establish more local refineries through strategic global partnerships.

Obele called on Nigerians to support every genuine investment capable of promoting industrialisation, employment opportunities, energy sufficiency, and economic growth rather than politicising developmental initiatives.

He added that no single refinery should dominate the nation’s energy market, emphasizing that competition remains essential for efficiency, price stability, innovation, and long-term sustainability in the sector.