The fresh plans to revamp the refineries

A few days ago, the Nigerian National Petroleum Company Limited (NNPCL) signed a fresh agreement with two Chinese firms to revamp the government’s refineries located in Port Harcourt and Warri, respectively. According to the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd), Bayo Ojulari, the Memorandum of Understanding (MoU) is a “critical milestone” in its refinery transformation drive and as new window for technical equity partnerships.

The deal was sealed on April 30 in the Chinese city of Jiaxing. The actual amount involved was not disclosed. The two Chinese firms are Sanjiang Chemical Company Ltd, and Xincheng (Fuzhou) Industrial Park Operators and Management Company Ltd. This is coming after the immediate past administration spent $2.39billion on the rehabilitation of the two refineries, drawing a backlash from experts. Also, not much is known about the two Chinese firms in the deal. There is no verifiable global refinery rehabilitation or operational competence associated with the two Chinese firms. However, the NNPCL boss has insisted that the MoU will set the stage for a potential technical equity partnership aimed at completing the work at the Port Harcourt and Warri refineries, as well as easing operational inefficiencies. The deal is also expected to go beyond revamping the two refineries, to include full-scale operation and maintenance of the facilities towards achieving the “best-in-class, sustainable performance.” The arrangement will ensure that the refineries produce cleaner fuels and higher value petroleum products in line with global standards.   

Under the agreement, the Chinese firms will bring engineering expertise and operational discipline and investment capacity that will align their returns with optimum performance. According to NNPCL, it also involves refinery expansion, petrochemical of gas-based industrial hubs around the facilities. Ordinarily, the agreement with the Chinese firms would have elicited cheers and optimism among Nigerians. However, past attempts to revive the refineries did not work. The NNPCL has promised so much and delivered little. Successive governments had invested so much in the annual Turn Around Maintenance (TAM) that never made the refineries to function effectively. The refineries have over time become a source of draining the nation’s national resources and encouraging perpetual importation of petroleum products. Since 2015, the federal government has committed over $2.9billion to the rehabilitation of Port Harcourt, Kaduna and Warri refineries. Latest reports indicate that under the present administration, about $2.8billion has been invested in reviving the refineries.

Despite these huge investments, the four government-owned refineries have remained largely non-functional, leading to renewed calls for their privatisation. This prompted the House of Representatives to request a probe into alleged $18billion spent on the refineries in the last two decades. Further disclosures by NNPCL show continued funding commitments, with about N10billion on refinery rehabilitation in 2021, averaging N8.33billion monthly throughout the year. The spending covered ongoing efforts to revive the four refineries, especially the PH and Warri refineries.

For instance, in 2021, the Federal Executive Council (FEC) during the Buhari presidency approved $1.5billion to revive the Port Harcourt refinery. The contract was awarded to Italian firm, Tecnimont SPA. The then Minister of State, Petroleum Resources, Timipre Sylva, urged Nigerians to hold him and the federal government accountable if the refinery failed to come on stream. Though the refinery was declared operational in late 2024, it was shutdown within months.

Again, as early as January, 2026, reports indicated that the PH refinery was no longer operational. While the NNPCL initially denied reports of a shutdown, claiming that rehabilitation had reached “90 per cent completion,” and would soon be functional within a “short timeframe.” It later admitted that the facility had been shutdown since May 2025 due to acute challenges. Under Goodluck Jonathan presidency, $39billion was committed to the TAM of the refineries between 2013 and 2015 alone. Beyond that, Gen. Sani Abacha regime spent $520 million on the four refineries. This was followed by $92million during the brief administration of Abdulsalami Abubakar. About $800million was spent on the refineries under the administration of Olusegun Obasanjo, while the government of Umaru Musa Yar’Adua oversaw an expenditure of $57millio in 2007 and $200million in 2009.

We believe that the new deal with the Chinese firms will not go the way of previous ones. Aliko Dangote has proved that one individual can run a successful refinery. The Dangote Petrochemical refinery located in Lagos has an installed capacity of 650,000 barrels per day, more than the four federal government-owned refineries combined. His is a template that NNPCL should borrow from. The failure of previous efforts to revamp the refineries must be due to corruption, lack of accountability and transparency, as well as lack of political and economic will on the government and the NNPCL management. Nigeria needs more refineries to cope with pressing market and consumer demands. The new plans to revamp the Port Harcourt and Warri refineries must be thorough, credible and transparent.