The Nigerian National Petroleum Company Limited (NNPCL) has opened discussions with foreign investors, including a Chinese petrochemical firm, as part of a strategy to restructure and revive Nigeria’s state-owned refineries.
The initiative comes as the Dangote Petroleum Refinery continues to ease pressure on domestic fuel supply, providing stability while government-owned facilities remain largely inactive.
Speaking at the Nigeria International Energy Summit 2026 in Abuja, NNPCL Group Chief Executive Officer, Bayo Ojulari, said the company’s board had approved a plan to bring in technically competent refinery operators as equity partners.
According to him, the objective is not an outright sale of the assets but a restructuring that would allow credible operators to acquire stakes and assume operational leadership.
“We are looking for partners with a proven track record of running refineries,” Ojulari said. “They must be willing to invest and take responsibility for performance.”
He explained that the proposed structure would allow new partners to lead refinery operations while NNPCL rebuilds internal technical capacity and shifts toward a commercially sustainable model.
Shift From Contractor-Led Model
Nigeria’s four state-owned refineries—two in Port Harcourt, and one each in Warri and Kaduna—have a combined installed capacity of 445,000 barrels per day. However, they have struggled to operate at meaningful levels despite multiple rehabilitation programmes over the past decade.
Ojulari said an internal review revealed structural inefficiencies and persistent losses.
He noted that crude utilization rates averaged between 50 and 55 percent, while operating and contractor costs continued to rise. In some instances, the value of refined output did not justify the crude input cost.
The NNPCL chief criticised previous financing arrangements in which engineering and maintenance contractors were paid upfront, leaving the company with long-term operational responsibility but limited capacity to sustain performance.
He said refinery margins globally remain thin, making it difficult for NNPCL, under its existing structure, to operate profitably without external operational expertise and shared financial risk.
Discussions With Investors Underway
Ojulari confirmed that engagement with potential investors has advanced. He disclosed that representatives of a major Chinese petrochemical company recently met with NNPCL officials and were scheduled to inspect refinery facilities. Other interested parties are also in discussions.
He emphasized that equity participation by experienced operators would ensure shared risk and long-term commitment, rather than relying on short-term service contracts.
Dangote Refinery Provides Buffer
Amid the restructuring effort, Ojulari acknowledged the stabilising role of the 650,000-barrel-per-day Dangote Petroleum Refinery.
While the plant does not yet fully satisfy domestic fuel demand, he said it has reduced Nigeria’s exposure to supply disruptions and import dependency. He also noted that NNPCL holds an equity interest in the privately owned refinery.
NNPCL has engaged with Dangote Group to define a framework for cooperation in line with the Petroleum Industry Act (PIA), Ojulari said, adding that collaboration remains central to maximising domestic refining value.
Production Outlook
On upstream output, Ojulari projected that Nigeria could achieve an average crude production of around 1.8 million barrels per day in 2026. However, he described the 2025 federal budget benchmark of 2.06 million barrels per day as ambitious.
The proposed refinery restructuring signals a broader shift within NNPCL toward commercial discipline and private-sector partnership, as the company seeks to end decades of underperformance in state-run refining.