The Nigerian National Petroleum Company Limited (NNPC) may sell off some of its refineries as it conducts a sweeping review of its downstream operations, Group Chief Executive Officer Bayo Ojulari revealed on Thursday.
Speaking in an interview with Bloomberg during the 9th OPEC International Seminar in Vienna, Austria, Ojulari confirmed that all options—including asset divestment—are on the table as the company reevaluates its refinery strategy.
“We’re reviewing all our refinery strategies now. We hope to conclude that review before the end of the year,” Ojulari said. “That review may lead to us doing things slightly differently… sale is not out of the question. All options are on the table.”
The statement marks a significant shift in the company’s position as Nigeria continues its long-running effort to rehabilitate its ailing state-owned refineries in Port Harcourt, Warri, and Kaduna.
Although the Port Harcourt refinery briefly resumed operations in November 2023, it was shut down again in May 2024 for maintenance, highlighting the technical and financial hurdles plaguing the sector.
“We’ve made significant investments over the years and introduced a lot of new technologies,” Ojulari explained. “Unfortunately, some of these technologies haven’t performed as expected. With these refineries being very old and previously abandoned, their rehabilitation is proving more complicated than initially projected.”
The NNPC chief also addressed Nigeria’s persistently high oil production costs, which he estimated to be between $25 and $30 per barrel—among the highest globally.
He attributed much of this to extensive spending on pipeline security, noting that investments have yielded 100% pipeline availability, a milestone in a country often plagued by vandalism and oil theft.
“There’s a capital cost, and there’s an operating cost,” he said. “Operating costs in Nigeria are currently over $20 per barrel, largely because of the security investments we’ve made. With time and increased stability, we expect those costs to decline.”
Despite the challenges, Ojulari expressed optimism about increasing Nigeria’s crude oil output to 1.9 million barrels per day by the end of the year, signaling confidence in the country’s upstream potential.
The NNPC’s consideration of a partial or full refinery divestment reflects a broader industry trend of privatization and performance-based restructuring, as the government seeks to reduce fiscal burdens while improving energy sector efficiency.
As the year progresses, energy stakeholders and the Nigerian public will be watching closely for the outcome of NNPC’s internal review—and whether it signals a new era for the country’s downstream sector.
About The Author
