Nigeria’s state-owned refineries, long plagued by inefficiency and low output, may finally be on the path to revitalization.
The Nigerian National Petroleum Company Limited (NNPC Ltd) has opened talks with foreign investors, including a major Chinese petrochemical firm, as part of a comprehensive strategy to revive the nation’s 445,000-barrel-per-day refining capacity.
The initiative, revealed by NNPC Group CEO Bayo Ojulari, signals a decisive shift from government-dominated operations to a more commercially driven model.
Speaking at the Nigeria International Energy Summit 2026 in Abuja, Ojulari outlined the company’s plans during a fireside chat titled “Securing Nigeria’s Energy Future.”
He emphasized that NNPC is not seeking outright sales of the refineries, but rather strategic partnerships with technically competent operators who can sustainably manage and operate the plants.
“So the current NNPC strategy, as approved by our board, is to focus on getting partners that have a track record of running refineries,” Ojulari said.
“We are not looking for contractors or Operations and Maintenance agreements. We want entities that can buy some of our shares, lead operations, and help rebuild our own skills.”
NNPC refinery revival: Focus on foreign investment and operational efficiency
NNPC refinery revival captures the company’s strategic pivot. Ojulari explained that the main objective is to establish a self-financing, sustainable refinery system capable of running like a private business.
He highlighted that historical attempts at rehabilitating the refineries have failed due to structural inefficiencies, low utilisation rates, and rising operational costs.
“Everywhere in the world, refinery margins are not very high. So there’s no way NNPC, under its current structure, can run a profitable refinery. We need additional capacity and strategic partnerships to complement existing operations,” he said.
Discussions with prospective investors, including a Chinese company that operates one of the largest petrochemical plants in China, have already advanced, with site inspections scheduled in the coming days.
The NNPC refinery revival initiative marks a potential turning point for Nigeria’s four state-owned refineries—Port Harcourt (two plants), Warri, and Kaduna—which have struggled to produce meaningful output despite billions spent on rehabilitation contracts between 2015 and 2023.
Low monthly crude deliveries, averaging just 50–55 percent utilisation, have exacerbated losses, while contractor and operating costs continued to climb.
Ojulari revealed that internal reviews highlighted systemic inefficiencies that had caused monumental financial losses.
“At Port Harcourt Refinery, we were producing mid-grade products. Comparing input costs to output value, it was value destruction,” he said, noting that political pressures to keep the refineries running only risked compounding losses.
Dangote Refinery’s lifeline for domestic fuel supply
While state refineries lag behind, Dangote Petroleum Refinery has emerged as a stabilizing force in Nigeria’s fuel supply chain.
With a capacity of 650,000 barrels per day, the privately owned refinery has provided NNPC and the government with breathing space to restructure the ailing state assets.
“Thank God for Dangote Refinery. Whether you love him or not, Nigerians should acknowledge that having a functional refinery gives us an opportunity to stabilise supply,” Ojulari said.
He underscored that local ownership matters for national energy security, allowing Nigeria to rely on domestic operations rather than full-scale imports.
Ojulari also confirmed that NNPC has engaged Dangote to explore collaboration aligned with the Petroleum Industry Act. “We agreed on a pathway toward deeper collaboration while maintaining NNPC’s institutional role,” he said, signalling a shift from confrontation to pragmatic partnership.
Outlook for Nigeria’s oil production
In addition to refinery restructuring, Ojulari expressed cautious optimism about crude oil production. He projected that Nigeria could achieve 1.8 million barrels per day in 2026, while acknowledging that the 2025 budget target of 2.06 million barrels per day was overly ambitious.
The NNPC refinery revival strategy demonstrates a move toward commercial discipline and private sector engagement, acknowledging that continued state-led operations under current conditions were economically unsustainable.
By attracting foreign partners and leveraging the Dangote Refinery’s operational capacity, NNPC aims to reduce losses, enhance fuel security, and rebuild Nigeria’s refining capabilities.
Ojulari’s candid remarks reflect a broader recognition within NNPC that decades of government-dominated operations have failed, and that the future of domestic refining depends on strategic collaboration, investment, and operational expertise.
