NNPC’s refineries: Another repair gambit

THE Group Chief Executive Officer (CEO) of the Nigeria National Petroleum Company, NNPC Limited (NNPC Ltd), Engr. Bashir Bayo Ojulari, caused shock waves around the country’s oil and gas sector and the economy at large when, in May, he announced the signing of another Memorandum of Understanding (MoU) with two Chinese firms on the repair and operational support for the Port Harcourt and Warri refineries. “Yet another round of repairs?” That was the question that reverberated across the public and private sectors of the economy as news of the new MoU echoed across the airwaves. A statement by the NNPCL’s Chief Corporate Communications Officer, Andy Odeh, said that the company signed the MoU with two Chinese companies named Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Limited and that the operations would cover a “potential Technical Equity Partnership (TEP) in support of the completion and operation of the Port Harcourt and Warri Refineries.”

According to the statement, the MoU was signed by Ojulari on behalf of the NNPCL; the chairman of Sanjiang Chemical Company, Guan Jianzhong, and the chairman of Xingcheng (Fuzhou) Industrial Park Operation and Management Company Limited, Bill Bi, in Jiaxing City, China. Quite expectedly, leaders in the public and private sectors, including professional bodies, weighed in on the development almost immediately, criticising the MoU for not meeting the threshold of transparency. For instance, the Nigeria Employers’ Consultative Association (NECA) called for accountability before more money could be committed to the project, while civil society organisations demanded clarity on the over $3.5 billion previously spent on the 2021 rehabilitation exercise. On his part, a former president of the Organised Private Sector of Nigeria (OPSN), Dela Oye, insisted that one of the Chinese firms lacked a track record in refinery turnaround maintenance and was facing financial constraints, while the other was primarily a real estate company. The MoU was also criticised for running the risk of repeating past failures which led to huge financial waste and zero results. The critics called for the consideration of better options, such as privatisation or the adoption of indigenous operators.

The alarm triggered by the development cannot be said to be misplaced. Once bitten, twice shy, goes the popular saying. In the present case, Nigerians have been bitten more than twice as far as the NNPCL’s moribund refineries are concerned. The announcement by Ojulari’s NNPC is even instructive. Less than a year ago, he announced that the company was considering the sale of its rundown refineries in view of the huge constraints on public finance. During an interview with Bloomberg on the sidelines of the 9th OPEC International Seminar in Vienna, Austria, in July 2025, the NNPCL’s Group Chief Executive said that selling the Port Harcourt, Warri and Kaduna refineries was an option under consideration due to the challenges of rehabilitation, and that a strategic review was underway. His words: “Sale is not out of the question. All the options are on the table, to be frank, but that decision will be based on the outcome of the reviews we’re doing now.”

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It is a thing of surprise that Ojulari and his team would conclude after the long months of review that what is best for Nigeria is to commit to another round of uncertainty, especially in the hands of Chinese companies which have no historical links with the construction of the refineries in question. It is even more confounding that the NNPCL would go public with such a position after the humongous waste that the refineries had contributed to the public purse in the last 20 years. Available public records show that the Federal Government and the NNPCL had spent an estimated $25 billion on Turn Around Maintenance (TAM) of the refineries in Port Harcourt, Warri, and Kaduna in the last 20 years. Though the figures tend to fluctuate depending on the volume of repairs included, the estimates have ranged from about $5–6 billion to over $25 billion. The joke has been on the Federal Government all along that, whereas a citizen of the country, Aliko Dangote, spent about $20 billion to build the biggest refinery in the world — the Dangote Refinery in Lagos—the Nigerian government has spent a similar amount, if not more, on its four refineries, which to date have remained mere conduits of ruin and waste. A 2023 report by the House of Representatives stated that over N11.35 trillion (about $25 billion) had been spent in the preceding 10 years (2013–2023) on fixing the dead refineries, which had continued to show zero capacity utilisation.

At the outset of the administration of President Bola Ahmed Tinubu, former President Olusegun Obasanjo reiterated his conviction that the nation’s refineries would never work again and advised that they should be sold. The GMD of NNPCL at the time, Mele Kyari, countered the former president. At a stage, he declared that the Port Harcourt refineries were technically completed, and even called on him (Obasanjo) to undertake a tour of the facility. However, it turned out that Kyari was only taking the nation and President Tinubu for a ride, as nothing came out of the $2.39bn expenditure he persuaded the late President Muhammadu Buhari to commit to the venture. The Port Harcourt Refinery was said to have been completed, with production starting in November 2024, but it was shut down after six months when the lid was blown open that the refinery was merely blending some products. This is a huge scam that has left a gaping hole in the common purse.

With the gory details already unravelled about the Chinese partners of Ojulari and the NNPCL, it would come as a huge surprise if President Tinubu allows the company to once again take Nigeria on another route to financial perdition. One of the famous quotes of the late President Muhammadu Buhari is this: “If we don’t kill corruption, corruption will kill us.” In the emerging scenario, if Nigeria doesn’t do something about NNPCL’s penchant for financial waste, the company will get Nigeria entangled in the worst financial infamy anyone can imagine.