Nigeria’s state-owned oil company, the Nigerian National Petroleum Company Limited (NNPC), has begun advanced discussions with foreign investors as it seeks to overhaul the operations of its long-struggling refineries through equity partnerships rather than outright sales.
The company’s chief executive officer, Bayo Ojulari, disclosed that NNPC is engaging experienced refinery operators, including a Chinese petrochemical firm, as part of a broader strategy approved by its board to revive the country’s four government-owned refineries, which have suffered years of losses and operational underperformance.
Ojulari said an internal review conducted shortly after he assumed office in April revealed that the refineries were operating at significant losses.
According to him, the facilities were characterised by high operating costs, heavy reliance on contractors, and low processing volumes, a combination that made sustained operations economically unviable.
“Our review showed that the refineries were losing large amounts of money,” Ojulari said. “Operating costs were extremely high, contractor expenses were excessive, and throughput levels remained far below optimal capacity.”
In response, NNPC’s board approved a shift away from the long-standing contractor-based model towards partnerships with refinery operators that have demonstrable technical and commercial expertise.
The new approach is designed to bring in equity partners who can take operational responsibility, improve efficiency, and enable the refineries to finance their own activities without persistent government support.
Ojulari confirmed that talks with potential investors are at an advanced stage, noting that representatives of one of the interested firms were scheduled to inspect a refinery as part of the due diligence process.
He described the company as a major Chinese petrochemical player with ownership of one of the largest petrochemical plants in China, though he declined to disclose its name.
“I’m just coming from a meeting with one of the potential investors,” he said. “They are visiting the refinery to inspect the assets and assess the scope for operational improvements.”
Nigeria has struggled for decades to rehabilitate its ageing refineries, which have consistently operated far below installed capacity.
As a result, Africa’s largest crude oil producer has relied heavily on imported refined petroleum products, exposing the economy to foreign exchange pressures and supply disruptions.
The government believes that bringing in technically competent and financially strong partners will help reverse this trend and reduce dependence on fuel imports.
Under the new framework, NNPC will retain ownership of the refineries but will relinquish a portion of equity to strategic partners, allowing them to play a direct role in management and operations.
Ojulari stressed that the refineries are not being sold, clarifying that the equity partnerships are intended to align incentives and ensure long-term sustainability.
“We are not divesting the assets,” he said. “We are bringing in partners who can operate them efficiently and help the refineries stand on their own financially.”
As part of the transition, NNPC has temporarily halted refinery operations to allow for a comprehensive assessment of options and to facilitate negotiations with prospective partners.
This pause, Ojulari noted, coincides with the commencement of operations at the Dangote Refinery, which has provided what he described as “breathing space” for domestic fuel supply.
The Dangote Refinery, Africa’s largest single-train refinery, has begun supplying refined products to the local market, easing immediate supply pressures and giving the government room to restructure state-owned assets without triggering shortages.
Analysts say the success of NNPC’s new strategy will depend on the credibility of the selected partners, the clarity of the operating framework, and the ability to insulate refinery operations from political and bureaucratic interference.
Previous rehabilitation efforts have failed largely due to poor execution, weak accountability, and misaligned incentives.
