After years of comatose, NNPCL, China sign MoU to restart, expand Port Harcourt, Warri refineries

After decades of being in comatose, there appears to be hope in the horizon as the Nigeria National Petroleum Company Limited (NNPCL) signed a Memorandum of Understanding (MoU) with two Chinese companies, Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd, for the restart and expansion of the Port Harcourt and Warri refineries.

According to the company, the agreement will see the NNPC Ltd and the Chinese companies collaborate through a potential Technical Equity Partnership (TEP) in support of the completion and operation of both facilities.

A statement Monday by the Chief Corporate Communications Officer, NNPC Ltd, Andy Odeh, said the agreement was signed by the Group CEO, NNPC Ltd, Engr. Bashir Bayo Ojulari, Chairman Sanjiang Chemical Company, Guan Jianzhong and Chairman of Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd, Bill Bi, in Jiaxing City, China, Thursday, April 30, 2026.

Last year, while fielding questions from journalists in Abuja, the NNPCL GCEO had said the state owned company would no longer be pouring money into repeated turnaround maintenance (TAM) cycles, insisting that instead it was focusing on securing technical/equity partners with proven refinery operating experience to manage, revamp, and run the state-owned refineries (Port Harcourt, Warri, and Kaduna).

The new approach, Ojulari bluntly noted, would be to prioritise world-class operators over continued government-funded fixes.

“We were just wasting money… The refineries were leaking value, and there was no clear line of sight on how those losses would ever turn into profits.

“We are no longer going to be spending any, you know, last year I think it was $1.5 billion. We’re not going to be spending such amounts on turnaround maintenance anymore.

“This system was designed for everyone to take from it, not to put anything into it. We are ending that era,” he had said.

*Scale of spending

Estimates of total spending on rehabilitation, TAM, and related efforts over the past 20–30 years range widely but are consistently enormous.

Over $20–25 billion — various reports and National Assembly references for rehabilitation efforts, especially from 2010–2024.

Recent example: N13.2 trillion spent/advanced by NNPC on the three refineries in 2023–2024 alone for TAM, operations, and related costs.

Specifically, the sum of $1.5 billion was spent for Port Harcourt Refinery rehabilitation (recent major effort).

Hundreds of millions for Warri and Kaduna (e.g., ~$741 million and ~$657 million in some approvals).

Earlier TAM contracts: $57 million (2000s), $20 million for Kaduna alone in 2009, $396 million (2013–2015), among several others.

*Latest framework

According to the NNPC Ltd, the potential framework would cover completion of outstanding work at the two refineries, together with operating and maintaining both facilities to achieve best-in-class, sustainable performance.

“Planned expansion and upgrades would elevate both facilities to cleaner, more profitable product standards.

“The potential collaboration also contemplates expanding the refineries’ petrochemical capacities and harnessing gas and downstream opportunities through the development of co-located, gas-based industrial hubs,” the company said in the statement.

*Significant milestone

Speaking shortly after the signing ceremony, the NNPCL boss described the MoU execution as a significant milestone, following more than six months of concerted engagement between the technical and management teams of NNPC and the two Chinese partners, Sanjiang and Xinganchen.

“All parties recognise mutually beneficial opportunities for the development and long-term sustainable profitability of NNPC’s refining assets in Nigeria, and the collective weight required for success,” Ojulari noted.

The NNPCL boss stated that the “MoU is an important step on the journey towards identifying potential technical equity partner(s) to restart and expand NNPC’s refineries, and to explore opportunities in co-located petrochemicals and gas-based industries.

“The MoU reflects the parties’ shared intent to progress discussions in good faith, with any definitive arrangements to follow in due course and subject to customary approvals.”

Earlier this year, the NNPCL helmsman disclosed that it was in talks with several technical partners that would take equity shares in the management of the Refineries.

*Past efforts

Before now, the federal government had spent $2.39 billion under the Buhari administration to repair the two refineries.

The Port Harcourt Refinery was said to have been completed, with production starting in November, 2024 but it was shut down after six months.

In March 2021, the Federal Executive Council (FEC) had approved $1.5 billion for the rehabilitation of Port Harcourt Refinery.

FEC had also approved $1.48bn for the rehabilitation of Warri and Kaduna refineries in August of that year.

The then Minister of State for Petroleum Resources, Timpere Sylva, had announced that the rehabilitation of Warri and Kaduna refineries would be awarded to Messers Saipem SPA and Saipem Contracting Limited at the combined total sum of $1.484 billion and would be rehabilitated in three phases of 21, 23 and 33 months.

Sylva had said $897,678,800 would be spent to repair Warri refinery, while Kaduna refinery would gulp $586,902,256, noting that the completion of the rehabilitation exercise would be in three phases spread over 77-month period.

But Odeh, in the statement, did not say how much Nigeria would pay for the new rehabilitation.

More so, the Warri Refining and Petrochemical Company has remained shut since 25 January 2025, barely a month after it was declared operational. This has sparked criticism over the NNPCL management of the nation’s refineries.

A document from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), last month, confirmed that the shutdown was due to safety concerns around the Crude Distillation Unit (CDU) Main Heater.

The plant was commissioned amid fanfare on 30 December 2024, after undergoing a $897.6 million rehabilitation.

Despite its relaunch being praised by President Bola Tinubu and then NNPCL Group Chief Executive Officer, Mele Kyari, operations ceased just weeks later.

Industry experts have described the situation as a failure of due diligence, transparency and oversight, especially in a sector critical to Nigeria’s economic stability.

The Warri Refinery, with a capacity of 125,000 barrels per day, was designed to produce key petroleum products such as Automotive Gas Oil (diesel), Straight-Run Kerosene, and naphtha. Located in the Ekpan, Uwvie, and Ubeji areas of Delta State, the facility also houses a petrochemical plant capable of producing 13,000 metric tonnes of polypropylene and 18,000 metric tonnes of carbon black annually.

Meanwhile, the Port Harcourt Refining Company (PHRC), recommissioned on 26 November 2024 after a long-delayed $1.5 billion revamp, is reportedly underperforming.

While the NNPCL had announced a 70 per cent operational capacity with plans to scale up to 90 per cent, the NMDPRA data shows it has averaged just 37.87 per cent over six months.

Between November 2024 and April 2025, the refinery produced a monthly average of 82.55 million litres of refined products, significantly below its estimated optimal output of 218 million litres. The plant’s outputs include Premium Motor Spirit blending components, diesel, household kerosene, and liquefied petroleum gas.

The inconsistency between official claims and actual performance has raised further questions about the credibility of NNPCL’s refinery rehabilitation projects.

Energy expert, Kelvin Emmanuel, plainly stated that the Warri, Port Harcourt, and Kaduna refineries were never truly set to resume operations.

Speaking on Arise News recently, Emmanuel described the televised commissioning as a “charade.”

The Warri and Port Harcourt refinery setbacks come at a time when Nigeria continues to face intermittent fuel scarcity, high energy costs, and growing public frustration over unmet reform promises in the oil sector.

Calls have intensified for the new NNPCL boss” to prioritise transparency and publish a full account of ongoing refinery projects.

Also, former President Olusegun Obasanjo recently said government-owned refineries will never work again.

Obasanjo spoke during a television interview aired live on Saturday night, April 25, on News Central.

He restated his position about the refineries as he said : “One of the lessons that I learnt is that PPP (public-private partnership) works. Look, one project that has not been destroyed by the government in Nigeria is the NLNG (Nigeria Liquefied Natural Gas), where the private sector has 51 per cent, and the Nigerian government has 49 per cent.”