The Nigerian National Petroleum Company Limited (NNPCL) has, for the umpteenth time, begun the process of fixing the Port Harcourt and Warri refineries, two of the federal government-owned refineries that are comatose. This is coming after the two refineries gulped $2.39 billion (over N3.2 trillion) in rehabilitation.
To bring the refineries back to life, the NNPC signed a Memorandum of Understanding (MoU) with two Chinese companies: 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 oil facilities.
NNPCL’s Chief Corporate Communications Officer, Andy Odeh, said the MoU was signed by the Group CEO, NNPCL, Engr. Bashir Bayo Ojulari, Chairman, Sanjiang Chemical Company, Guan Jianzhong and Chairman of Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd, Bill Bi, in Jiaxing City, China, last Thursday.
The federal government had spent $2.39bn under the previous administration to repair the two refineries. Only the Port Harcourt Refinery was said to have been completed with production starting in November, 2024. However, it was shut down on May 24, 2025, amidst controversy over the output from the refinery.
In March 2021, the FEC approved the sum of $1.5 billion for the rehabilitation of the Port Harcourt refinery plant, which operates two refineries: the old plant with a capacity of 60,000 barrels per stream day (bpsd) and a new facility with 150,000 bpsd, bringing the refinery’s combined crude processing capacity to 210,000 bpsd.
FEC also approved the sum of $1.48bn for the rehabilitation of Warri and Kaduna refineries in August 2021.
The then Minister of State for Petroleum Resources, Timpere Sylva, announced at the end of the weekly FEC meeting in Abuja.
Sylva said the rehabilitation of Warri and Kaduna refineries would be awarded to Messers Saipem SPA and Saipem Contracting Limited at the combined total sum of $1.484bn and would be rehabilitated in three phases of 21, 23 and 33 months.
Sylva said $897,678,800 would be spent to repair the Warri refinery, while the Kaduna refinery would gulp $586,902,256, noting that the completion of the rehabilitation exercise would be in three phases spread across 77 months’ period.
But Odeh, in the statement released on Monday, quoted the GCEO of the NNPC Ltd, Engr. Ojulari, as saying that the MoU execution serves as a significant milestone, following more than six months of concerted engagement between the technical and management teams of the NNPC and the two Chinese partners, Sanjiang and Xinganchen.
But the statement did not state how much Nigeria would pay for the new rehabilitation.
“All parties recognise mutually beneficial opportunities for the development and long-term sustainable profitability of NNPC’s refining assets in Nigeria, and the collective weight required for success,” Ojulari noted.
The GCEO further stated that the MoU is an important step on the journey towards identifying potential technical equity partner(s) to restart and expand NNPC’s refineries, and to explore opportunities in co-located petrochemicals and gas-based industries.
The MoU reflects the parties’ shared intent to progress discussions in good faith, with any definitive arrangements to follow in due course and subject to customary approvals.
It stated that the potential framework would cover completion of outstanding work at the two refineries, together with operating and maintaining both facilities to achieve best-in-class, sustainable performance. Planned expansion and upgrades would elevate both facilities to cleaner, more profitable product standards.
“The potential collaboration also contemplates expanding the refineries’ petrochemical capacities and harnessing gas and downstream opportunities through the development of co-located, gas-based industrial hubs,” it added.
It was gathered that with the MoU, the Chinese firms would operate the two refineries when the rehabilitation is completed.
A source who spoke last night said, “What the NNPCL has done was to look for a technical partner instead of an outright sale, as some people have demanded. What this means is that the NNPC would still have an interest in the operation of the refineries, but the details of the partnership would be made known.”
There have been several recommendations from stakeholders and experts on the two refineries, with some stakeholders calling for outright sale as the refineries continue to gulp trillions of taxpayers’ money.
In May 2023, the House of Representatives Ad-hoc Committee on the State of Refineries in the country said the federal government spent over N11 trillion on the rehabilitation of the refineries from 2010 to 2023.
When the new NNPCL management took over, the GMD hinted about selling the refineries, noting that they had become conduit pipes.
However, the management backtracked and instead chose to look for technical partners in its bid to revive the state-owned refineries.