NNPC signs new refinery repair deal after billions spent with no success

After years and billions of dollars spent trying to revive Nigeria’s dormant refineries, the Nigerian National Petroleum Company Limited (NNPC) is again promising a reset. This time, the state oil firm has signed a fresh agreement with two Chinese companies to restart the Port Harcourt and Warri plants.

NNPC said it signed a Memorandum of Understanding with Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd to explore a Technical Equity Partnership (TEP), a model that would bring in external operators to help complete rehabilitation and run the refineries.

The agreement, signed in Jiaxing, China, marks a shift from previous approaches that relied heavily on engineering contracts. Under the proposed framework, the Chinese firms could not only finish outstanding work but also operate and maintain the facilities, potentially aligning incentives more closely with performance.

Nigeria’s refinery revival efforts are littered with failed timelines and rising costs. Under the previous Buhari administration, about $2.39 billion was committed to rehabilitating Port Harcourt and Warri refineries.

Port Harcourt, comprising a 60,000 barrels-per-day old plant and a 150,000 bpd newer facility, was declared operational in late 2024, only to shut down again in May 2025 amid controversy over output levels.

Warri and Kaduna refineries were also earmarked for a combined $1.48 billion overhaul, with phased completion timelines stretching up to 77 months. More broadly, lawmakers have estimated that over N11 trillion was spent on refinery repairs between 2010 and 2023.

What’s different this time?

NNPC’s Group CEO Bashir Ojulari described the MoU as a “significant milestone” after months of engagement, adding that the partnership aims to deliver “long-term sustainable profitability” for Nigeria’s refining assets.

The framework also goes beyond basic refining. It includes plans to expand into petrochemicals, develop gas-based industrial hubs and upgrade facilities to produce cleaner, higher-value fuels.

The NNPC has not disclosed the cost of the new arrangement, financing structure, performance guarantees and timeline for completion.

Energy analysts say those gaps are hard to ignore given the sector’s history.

The emergence of the privately owned Dangote Refinery has begun to ease supply pressures, but it has also reshaped the market, raising concerns about dominance if state refineries remain idle.