Nigeria’s National Oil Corporation has dramatically shifted its refinery strategy, narrowing down potential investor and technical partners to just three companies as it seeks to revive its struggling refineries through private sector partnerships. The move represents a major policy reversal for Africa’s largest oil producer, which has spent approximately $3 billion over the past six years attempting to rehabilitate its four refineries with limited success.
After a comprehensive three-month benchmarking exercise completed in September 2025, NNPC’s seven-month-old executive management and board of directors decided to pursue partnerships where private companies would invest in and operate the facilities while NNPC retains a minority but decisive stake. This abandons the previous approach of state-funded turnaround maintenance with NNPC maintaining oversight control.
The negotiations, which have intensified over the past six weeks through the office of the Executive Vice President for Downstream operations, have focused primarily on NNPC’s two refineries in Port Harcourt in the eastern part of the country. If successful, the model will be extended to the Warri Refinery in the idwest and the Kaduna refinery in the north. The four refineries have a combined nameplate capacity of 445,000 barrels per stream day but have been largely non-performing over the past 15 years despite coming online between 1965 and 1989.
Between 2019 and mid-2023, Nigeria’s Federal Executive Council approved approximately $3 billion for phased rehabilitation of the refineries, with work led by specialized contractors including Marie Technimont of Italy for the Port Harcourt plants and Daewoo Construction of Korea for Warri and Kaduna. However, significant commissioning problems have persisted despite the substantial investment. One ranking manager in the logistics unit explained that selling the refineries after such expenditure would amount to massive value destruction and public backlash.
The emergence of the Dangote Refinery, with its 650,000 barrels per stream day nameplate capacity and gasoline output of at least 30 million liters daily, presents formidable competition. However, NNPC Group CEO Bayo Ojulari declared on LinkedIn that the corporation remains determined and optimistic about ensuring the refineries operate effectively to meet the Petroleum Industry Act requirement as the supplier of last resort for petroleum products.
Source: africaoilgasreport.com