The Nigerian National Petroleum Company Limited (NNPC Ltd) is weighing the option of selling some of its refineries as part of an ongoing strategic overhaul of its operations, according to the Group Chief Executive Officer, Bayo Ojulari.
Ojulari disclosed this during an interview with Bloomberg on the sidelines of the 9th OPEC International Seminar held Thursday in Vienna, Austria. He said the company is conducting a comprehensive review of its downstream assets, including state-owned refineries, with conclusions expected before the end of the year.
“We’re reviewing all our refinery strategies now,” Ojulari stated. “That review may lead to us doing things slightly differently. Sale is not out of the question. All options are on the table.”
The review comes as Nigeria continues to struggle with reviving its aging refineries in Port Harcourt, Warri, and Kaduna. The Port Harcourt plant, which briefly restarted operations in late 2023, was shut again in May for further maintenance.
Ojulari attributed the setbacks to a combination of legacy issues and underperforming technologies introduced during past rehabilitation efforts. “Some of the technologies have not worked as expected. These are very old refineries, and revamping them has proven more complicated than anticipated,” he said.
High Operating Costs and Security Spending
Speaking further, Ojulari highlighted Nigeria’s high crude production costs, which he said currently range between $25 and $30 per barrel. He explained that a significant portion of these costs stems from investments in securing the country’s pipeline infrastructure.
“Our operating cost is over $20 per barrel,” he said. “We’ve invested heavily to achieve 100% pipeline availability. While this has stabilized operations, it has also increased our production expenses.”
Despite these challenges, NNPC remains optimistic about ramping up production. The company aims to boost Nigeria’s daily crude output to 1.9 million barrels by the end of 2025.
As the strategic review progresses, stakeholders are closely watching for decisions that could reshape Nigeria’s downstream oil industry, including the possible divestment of the country’s long-troubled state-owned refining assets.