The national oil company said the two refineries must transition into commercially sustainable businesses capable of generating value, attracting investment and securing financing based on their operational performance rather than crude oil allocations.
The Group Chief Executive Officer of NNPC Ltd, Bayo Ojulari, disclosed the new direction on Tuesday during the Nigeria Oil and Gas Conference in Abuja, where he explained that the company was moving toward a business model that prioritises productivity, efficiency and profitability.
According to Ojulari, the era of funding refinery projects through loans tied to crude oil barrels was no longer sustainable, stressing that the facilities must be able to stand on their own financially.
“You heard me talking about our refineries. We’re moving away from situations where the refineries are taking loans based on barrels and not linked to the productivity and performance of the refineries. We are changing that,” he said.
He added that the future of the refineries depended on their ability to operate effectively, attract financing independently and deliver value without relying on continuous government-backed support.
“Our solution has to be that those refineries are able to work, raise their own, and deliver, not more contractors coming to take value. That’s the strategy. That’s sustainability. And that’s what will live beyond us,” Ojulari stated.
The announcement represents a significant change in NNPC’s refinery strategy as the company seeks to reposition the state-owned facilities as commercially driven assets rather than projects dependent on public funding.
NNPC Targets Profitable Energy Assets
Ojulari explained that the company had been reviewing its investment portfolio and removing projects that lacked clear financing structures and profitability prospects.
He noted that some previous infrastructure initiatives placed financial pressure on NNPC because they lacked defined pathways for repayment, revenue generation and commercial success.
“We recognise that our portfolio has put NNPC into a lot of problems in the past years, where a lot of infrastructure development projects do not have a clear line of sight to finance. They do not have a clear line of sight to profitability. We eliminated all of that from our portfolio last year,” he said.
The NNPC chief executive said the company had now adopted a new approach where major infrastructure projects would be financed based on their own economic value and ability to generate revenue.
He cited the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project as an example of the new financing philosophy.
“For the first time, we put in a new financing for infrastructure that has never been done in Nigeria, ‘Project Nexus’, where we are able to put financing against the AKK pipeline based on its own throughput, not from another barrel from anywhere. That is the way we are going,” Ojulari explained.
He said the same principle would guide the future of Nigeria’s refineries, adding that the plants would require strong partnerships across engineering, logistics, technology and marketing to succeed.
“Our refinery ambition depends on integrated partnership. You can see that across engineering, logistics, technology, and marketing. Our energy transition journey requires collaboration with innovators and researchers, development institutions and new technology,” he added.
Chinese Partnership Plan for Port Harcourt, Warri Refineries
The latest announcement comes shortly after NNPC signed a Memorandum of Understanding with Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Company Ltd to explore a technical equity partnership involving the Port Harcourt and Warri refineries.
The proposed partnership could introduce a new ownership and management structure similar to the model used by Nigeria LNG Limited, where private and institutional investors hold equity stakes in a commercially operated energy venture.
Under the proposed arrangement, the Chinese companies may acquire a significant stake in the refineries, reportedly around 51 per cent, while participating in the completion of outstanding rehabilitation works, operations and maintenance, expansion projects, petrochemical integration and gas-based industrial developments.
Unlike the traditional contractor-based approach, the partnership is expected to focus on long-term equity participation, shared governance and commercial accountability.
However, NNPC noted that any final agreement would only proceed after detailed technical, financial, commercial and legal assessments.
During a recent inspection visit to the Warri refinery, Ojulari described the proposed partnership as part of a broader effort to transform the facilities from rehabilitation projects into profitable businesses.
He said the company was searching for the right technical and financial partners who could help ensure that the refineries operate efficiently, compete commercially and deliver long-term economic benefits.
Ojulari Maintains Confidence in Refineries’ Future
For years, Nigeria’s state-owned refineries have faced criticism over repeated rehabilitation efforts, operational challenges and billions of naira spent without achieving sustained production.
While some Nigerians remain doubtful about whether the facilities can return to full commercial operations, Ojulari expressed confidence that the refineries can be restored and repositioned under a sustainable business framework.
He maintained that the objective was no longer simply to repair the plants but to build profitable energy assets capable of attracting investment, creating value and financing their own operations.
The NNPC boss said the new model would ensure that the Port Harcourt, Warri and Kaduna refineries move away from dependence on crude-backed financing and become commercially viable facilities that can contribute meaningfully to Nigeria’s energy security and industrial growth.