KEY POINTS
• NNPC Ltd. says it is pursuing technical equity partnerships with experienced refinery operators to improve the long-term performance of its refineries.
• Chinese investors are studying two refineries and may submit a proposal after completing technical assessments, but no final agreement has been reached.
• NNPC says it wants stronger governance, transparency and performance standards as it works towards becoming a globally competitive energy company.
MAIN STORY
The Nigerian National Petroleum Company Ltd. (NNPC Ltd.) is seeking technical partners with proven refinery operating experience to take equity stakes in its facilities as part of efforts to achieve sustainable performance.
Mr Bayo Ojulari, Group Chief Executive Officer of NNPC Ltd., disclosed this on Tuesday in Abuja while briefing newsmen on the company’s plans for its refineries.
Ojulari said the proposed model would bring experienced operators into the facilities as equity partners, aligning their commercial interests with those of NNPC.
He said the company was particularly interested in partners with established records in operating refineries and petrochemical plants.
According to him, Chinese investors have expressed strong interest in two of the refineries, although discussions have not yet resulted in a final agreement.
An existing Memorandum of Understanding allows the Chinese team to carry out technical studies of the facilities before presenting a proposal to NNPC.
Ojulari said the outcome of the assessment would determine the basis for subsequent commercial and technical negotiations.
The level of interest, he said, was reflected in the deployment of 33 senior Chinese engineers who had spent about three months examining the facilities.
He said NNPC would consider the findings of the technical studies before determining the next steps towards a possible partnership.
The NNPC chief executive, however, clarified that rehabilitation work had not started at the Kaduna Refinery, although the company remained committed to moving the process forward.
He said the broader objective was to build an energy company capable of competing at global standards, requiring NNPC to improve its governance framework, transparency and accountability while maintaining sustainable performance.
Ojulari said the company’s ambition extended beyond simply restoring individual refineries, describing the desired transformation as one comparable to the standards of Saudi Aramco, Saudi Arabia’s state-owned energy company.
“We are going to be Saudi Aramco. That is what we are talking about. Nothing less,” he said.
He added that achieving the ambition would require NNPC to strengthen the systems and standards governing how the company operates and measures performance.
THE ISSUES
- The proposed equity partnership model would shift refinery rehabilitation and operations towards a structure in which technical partners have a direct commercial interest in the performance of the facilities. NNPC says this is intended to align the interests of the company and its partners around sustainable results.
- Chinese investors have shown interest in two refineries, but the process remains at the technical assessment stage. Their engineers have completed about three months of studies, after which a proposal is expected before commercial and technical negotiations can begin.
- The Kaduna Refinery remains outside active rehabilitation work for now. NNPC says it is still advancing the process, while its wider refinery strategy is being linked to its stated ambition of improving governance, transparency and operational performance.
WHAT’S BEING SAID
“The model will align the interests of NNPC and its technical partners towards achieving sustainable results from the refineries.” — Bayo Ojulari, Group Chief Executive Officer, NNPC Ltd.
“Chinese investors have shown strong interest in the two refineries, although no final agreement had been signed.” — Bayo Ojulari, Group Chief Executive Officer, NNPC Ltd.
“Once the Chinese finish the report of their study, they will come back to us with a proposal. Following that proposal, we will go into negotiations, both commercial and technical.” — Bayo Ojulari, Group Chief Executive Officer, NNPC Ltd.
“We are going to be Saudi Aramco. That is what we are talking about. Nothing less.” — Bayo Ojulari, Group Chief Executive Officer, NNPC Ltd.
WHAT’S NEXT
The Chinese technical team is expected to conclude its assessment of the two refineries and submit a proposal to NNPC.
The proposal will form the basis for commercial and technical negotiations if the parties decide to proceed with the partnership.
NNPC is also expected to continue work towards advancing the Kaduna Refinery process while strengthening the governance and performance standards it says are necessary for its wider transformation.
BOTTOM LINE
NNPC is seeking to bring experienced refinery operators into its facilities as equity partners rather than relying solely on rehabilitation arrangements. The immediate focus is on completing technical studies and assessing proposals, while the company says stronger governance and performance standards will be central to its refinery strategy.
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