The Nigerian National Petroleum Company (NNPC) Limited has announced it is ending the practice of financing the Port Harcourt and Warri refineries through loans backed by crude oil production, demanding instead that the facilities become commercially self-sustaining.
Its Group Chief Executive Officer (GCEO), Bayo Ojulari, disclosed the shift on Tuesday while speaking at the Nigeria Oil and Gas Conference in Abuja, describing it as a fundamental change in how the national oil company approaches refinery funding.
"You heard me talking about our refineries. We're moving away from situations where the refineries are taking loans based on barrels and not linked to the productivity and performance of the refineries. We are changing that.
"Our solution has to be that those refineries are able to work, raise their own, and deliver, not more contractors coming to take value. That's the strategy. That's sustainability. And that's what will live beyond us," Ojulari said.
The declaration is seen departure from decades of state-backed financing for the refineries, which have long been a drain on public resources.
Under the new model, future funding for both facilities will be tied to their operational performance and productivity rather than crude oil volumes.
Ojulari said NNPC had already begun restructuring its investment portfolio by cutting projects that lacked clear financing and profitability prospects.
"We recognise that our portfolio has put NNPC into a lot of problems in the past years, where a lot of infrastructure development projects do not have a clear line of sight to finance.
"They do not have a clear line of sight to profitability. We eliminated all of that from our portfolio last year," he said.
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He cited the Ajaokuta-Kaduna-Kano (AKK) gas pipeline as an example of the new financing approach the company was applying more broadly.
"For the first time, we put in a new financing for infrastructure that has never been done in Nigeria, 'Project Nexus', where we are able to put financing against the AKK pipeline based on its own throughput, not from another barrel from anywhere. That is the way we are going," he said.
The announcement comes weeks after NNPC signed a Memorandum of Understanding (MoU) with Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Company Ltd to explore a technical equity partnership for the Port Harcourt and Warri refineries.
Under the proposed arrangement, the Chinese investors could acquire approximately 51 per cent stake in the facilities, in a structure that may mirror the Nigeria Liquefied Natural Gas (NLNG) ownership model.
The Chinese firms are expected to participate in completing outstanding engineering works, operations and maintenance, capacity expansion, petrochemical integration and gas-based industrial projects around both refinery complexes.
The arrangement is designed to replace the traditional contractor model with long-term equity participation and joint governance, subject to technical, commercial, financial and legal due diligence before any binding agreement is signed.
Ojulari said NNPC's broader refinery ambitions would depend on integrated partnerships across engineering, logistics, technology and marketing.
"Our refinery ambition depends on integrated partnership. You can see that across engineering, logistics, technology, and marketing.
"Our energy transition journey requires collaboration with innovators and researchers, development institutions and new technology," he said.
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