Nigeria’s state-owned oil company is in discussions with a Chinese firm as part of efforts to rehabilitate the country’s long-struggling refineries and restore domestic processing capacity.
Speaking on Wednesday, the chief executive of the Nigerian National Petroleum Company, Bayo Ojulari, said the company is seeking experienced refinery operators as equity partners to turn around its four refineries, which have suffered years of losses and underperformance.
He explained that an internal review conducted after he assumed office in April last year revealed high operating costs, heavy contractor spending and low processing volumes. Ojulari said the company’s board has approved a strategy that shifts away from contractor-led arrangements towards partnerships
with operators that have proven technical and commercial expertise. He noted that talks with several potential investors are at an advanced stage and disclosed that a Chinese company with one of the largest petrochemical plants in China is expected to inspect one of the refineries.
Nigeria has for years struggled to rehabilitate its ageing refineries, forcing Africa’s largest crude oïl producer to rely heavily on imported fuel. According to Ojulari, the temporary shutdown of the plants to assess recovery options coincided with the start of operations at the Dangote Refinery, which has provided some relief to domestic fuel supply.
He stressed that the refineries are not being sold, but that the national oil company intends to relinquish a portion of equity to strategic partners to allow the facilities to finance their operations sustainably.