The Nigerian National Petroleum Company Limited (NNPC Ltd) has announced plans to discontinue the practice of funding the Port Harcourt and Warri refineries through loans secured with crude oil production, introducing a new commercial model focused on operational performance and financial sustainability.
The company said the refineries will be expected to generate enough value to attract financing independently, rather than relying on debt backed by crude oil output.
NNPC Group Chief Executive Officer, Bayo Ojulari, disclosed the new strategy while speaking at the Nigeria Oil and Gas Conference in Abuja, stating that the long-term objective is to transform the refineries into profitable businesses capable of sustaining their own operations.
According to Ojulari, future financing will be based on each refinery’s productivity, efficiency and commercial performance instead of the volume of crude oil allocated to them.
He explained that the company is determined to eliminate funding arrangements that fail to deliver measurable value, stressing that the goal is to ensure the refineries operate independently without continued reliance on contractors or government-backed financing.
Ojulari noted that NNPC has already reviewed its investment portfolio, removing projects that lacked clear financing plans or realistic prospects for profitability.
He added that the company has also introduced a new infrastructure financing approach, using the Ajaokuta-Kaduna-Kano (AKK) gas pipeline as an example. Under the model, financing is tied directly to the project’s expected revenue and operational performance rather than external crude oil resources.
The NNPC boss said the same commercial principles would guide the future of Nigeria’s refineries, with greater emphasis on strategic partnerships involving engineering, logistics, technology, marketing and energy transition initiatives.
His comments come shortly after NNPC signed a Memorandum of Understanding with Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Company Limited to explore a technical equity partnership for the Port Harcourt and Warri refineries.
The proposed partnership could result in the Chinese firms acquiring about a 51 per cent stake in the refineries as part of plans to complete rehabilitation works, expand production capacity and improve commercial operations.
The arrangement is expected to include engineering services, operations and maintenance, petrochemical integration, gas-based industrial development and long-term joint management, subject to the successful completion of technical, financial, commercial and legal assessments.
During a recent visit to the Warri refinery, Ojulari described the initiative as a strategic effort to build profitable and sustainable refinery businesses rather than simply complete rehabilitation projects.
He reaffirmed that NNPC is committed to repositioning the Port Harcourt, Warri and Kaduna refineries as commercially viable assets capable of attracting investment, generating independent funding and delivering long-term value.
Despite public skepticism over the future of the state-owned refineries, Ojulari expressed confidence that the facilities can return to profitable operations under the company’s new commercial strategy.
