NNPCL mulls selling PH, Warri and Kaduna refineries,…says plants becoming more difficult to fix

NNPCL GCEO

The Nigerian National Petroleum Company (NNPC) Limited has disclosed that it is becoming a ‘bit more’ complicated to revamp state-owned refineries.

The Group Chief Executive Officer (CEO) of NNPCL, Bayo Ojulari, made the revelation in an interview with Bloomberg.

According to Ojulari, the NNPC is currently reassessing its refineries strategies and aims to finalise the review by year-end.

The NNPC had on November 26, 2024, said the Port Harcourt refinery had officially commenced crude oil processing, but the refinery shut down in May for maintenance.

The Warri and Kaduna refineries are, however, still undergoing rehabilitation.

However, while speaking on the sidelines of the 9th OPEC international seminar in Vienna, Austria, the NNPCL boss said: “Concerning the refineries, we made quite a lot of investment over the last several years and brought in a lot of technologies. We’ve been challenged.

“Some of those technologies have not worked as we expected so far. But also, as you know, when you’re refining a very old refinery that has been abandoned for some time, what we’re finding is that it’s becoming a little bit more complicated.

“So we’re reviewing all our refinery strategies now. We hope before the end of the year, we’ll be able to conclude that review. That review may lead to us doing things slightly differently”.

Ojulari further said NNPC remains uncertain whether the review will result in the sale of the refineries.

“But what we’re saying is that sale is not out of the question. All the options are on the table, to be frank. But that decision will be based on the outcome of the reviews we’re doing now”, he said.

Ojulari also said the operating cost of oil production in Nigeria ranges between $20 and $30 per barrel.

“For the cost of crude production, there’s a capital cost and there are the operating costs.

“The operating cost right now in Nigeria is hovering over $20 per barrel, which is quite high.

“Part of that is because of the investment we’ve had to make in terms of security of our pipelines, which as you know, today we have 100 percent availability of our pipelines. That came out of significant investment.

“So we believe with time, with stability, that cost will start going down, but for now it’s somewhere between $25 and $30 a barrel”.

Ojulari added that by the end of the year, the country plans to increase oil output to 1.9 million barrels per day.