By Ayo Kehinde
The Nigerian National Petroleum Company Limited (NNPC Ltd.) says it is ending the practice of financing the Port Harcourt and Warri refineries with crude-backed loans, as it shifts to a commercial funding model aimed at making the facilities financially self-sustaining.
Group Chief Executive Officer of NNPC Ltd., Bayo Ojulari, disclosed this on Tuesday at the Nigeria Oil and Gas Conference in Abuja.
He said future financing for the refineries would be tied to their operational performance and ability to generate revenue rather than crude oil production.
According to Ojulari, the company’s long-term strategy is to reposition the refineries as commercially viable businesses capable of attracting financing independently.
He stated, “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.
“Our solution has to be that those refineries are able to work, raise their own financing, and deliver. That is sustainability, and that is what will live beyond us.”
Ojulari said the decision forms part of a broader restructuring of NNPC’s investment portfolio, which has seen the company discontinue projects without clear financing plans or profitability prospects.
He noted that the company has also adopted a new infrastructure financing model, citing the Ajaokuta-Kaduna-Kano (AKK) gas pipeline under the “Project Nexus” framework, where financing is backed by the project’s expected gas volumes transported through the pipeline rather than crude oil revenues.
The NNPC boss added that the same commercial principles would guide the company’s refinery strategy, with greater emphasis on partnerships across engineering, technology, logistics and marketing.
The announcement comes weeks after NNPC signed a Memorandum of Understanding 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.
The proposed arrangement, which is subject to technical, financial, and legal due diligence, could see the Chinese firms acquire a majority stake in the refineries while participating in rehabilitation, operations, maintenance, and capacity expansion.
Ojulari said the objective is to transform the refineries into profitable, sustainable businesses capable of attracting long-term investment rather than relying on government-backed financing, expressing confidence that the facilities can become commercially viable once again.
