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🇳🇬 Nigeria /Energy & Infrastructure

NNPC Begins Refinery Evaluation Phase Amid Public Criticism

From ThisDay · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources New plan
  • Nigeria's NNPC has begun evaluating potential private partners for the Port Harcourt and Warri refineries, despite public criticism over past rehabilitation spending.
  • NNPC CEO Bayo Ojulari stated the evaluation phase is crucial for long-term commercial viability and requires the right technical and business partners.
  • Ojulari assured that prospective partners will cover due diligence costs and emphasized a broader vision for downstream sector investment, including petrochemicals and gas-based industries.

The Nigerian National Petroleum Company Limited (NNPC) has initiated the evaluation phase for potential private partners to operate the Port Harcourt and Warri refineries. This move proceeds despite significant public criticism regarding the nearly $3 billion spent on their rehabilitation without achieving sustained operation.

Fixing a refinery takes more than pipes and pumps. It takes the right partners. That’s the thinking behind the MoU recently signed for the Port Harcourt and Warri Refineries, now moving into a rigorous evaluation phase.

— Mr. Bayo OjulariExplaining the rationale behind bringing in private partners for refinery operations.

NNPC Group Chief Executive Officer Mr. Bayo Ojulari announced on his X handle that the process has progressed to rigorous due diligence following a recently signed Memorandum of Understanding (MoU) with prospective partners. He stressed that the objective is to ensure the refineries' long-term commercial viability, moving beyond short-term fixes. Ojulari argued that reviving refineries necessitates more than just equipment replacement, emphasizing the critical role of suitable technical and business partners for sustainable operations.

The MoU is an agreement to explore working together, not a binding contract.

— Mr. Bayo OjulariClarifying the nature of the Memorandum of Understanding with prospective partners.

"Fixing a refinery takes more than pipes and pumps. It takes the right partners," Ojulari stated, explaining the strategic shift towards a performance-based business partnership model. He clarified that the MoU is not a binding agreement but a framework for exploring collaboration, pending the outcome of technical and commercial evaluations. This approach aims to deliver profitable and self-sustaining refinery operations.

Prospective partners are covering the full cost, which keeps the process data-driven.

— Mr. Bayo OjulariAddressing concerns about the financial implications of the due diligence process.

Addressing financial concerns, Ojulari revealed that prospective partners will bear the full cost of the due diligence process, ensuring objectivity and data-driven decision-making without burdening NNPC. Beyond restoring these two refineries, the NNPC envisions deepening Nigeria's downstream value chain through investments in petrochemicals and gas-based industries, including new methanol plants, to bolster industrial growth and energy security.

The vision includes expanding the petrochemicals value chain and investing in gas-based industries, including new methanol plants.

— Mr. Bayo OjulariOutlining the long-term strategy for Nigeria's downstream sector.
DistantNews Editorial

Originally published by ThisDay in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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