Abuja — Nigeria’s NNPC is in talks with a Chinese company over one of the state-owned oil firm’s refineries, its chief executive said on Wednesday.
NNPC chief executive Bayo Ojulari said the company was seeking experienced operators as equity partners to revive its four refineries after years of losses and underperformance.
He said an internal review carried out shortly after assuming his role last April showed the refineries were running at huge losses, with high operating costs and heavy spending on contractors while processing volumes remained low.
NNPC’s board has approved a strategy to bring in refinery operators with proven expertise rather than contractors, Ojulari said, adding that the company was in advanced talks with several interested parties.
“I’m just coming from a meeting with one of the potential investors,” Ojulari said, without giving a name. “They are going to the refinery tomorrow to inspect. It’s a Chinese company that has one of the biggest petrochemical plants in China.”
Nigeria has struggled for years to rehabilitate its aging refineries, which have operated far below capacity, forcing Africa’s largest crude oil producer to rely heavily on imported fuel. The government hopes new partnerships will help reverse that trend.
Ojulari said the plants have been halted to allow time to assess options for restoring them, coinciding with the launch of Dangote Refinery which offered “breathing space” for domestic fuel supply.
He said NNPC was not selling the refineries but would relinquish a portion of their equity to partners to enable the plants to self-finance their operations.
*Camillus Eboh, Chijioke Ohuocha; editing: Kirsten Donovan – Reuters
