‘Repair becoming complicated’: NNPC to consider selling Nigeria’s refineries in Warri, Port Harcourt and Kaduna

The Nigerian National Petroleum Company Limited (NNPC Ltd) has announced plans to sell the country’s refineries in Warri, Port Harcourt, and Kaduna.

The Group Chief Executive Officer (CEO) of the NNPCL, Bayo Ojulari, who spoke in an interview with Bloomberg, admitted that it is becoming a “bit more” complicated to revamp the refineries.

He said, “We’ve made quite a lot of investments in our refineries over the last several years and brought in a lot of technology. We’ve been challenged – some of those technologies have not worked as expected so far. But also, as you know, when you are refining a very old refinery that has been abandoned for some time, what we found is that they are a little bit more complicated.

“So, we are reviewing all our refinery strategies now. We hope that before the end of the year, we will conclude that review. That review will lead us to doing things slightly differently.”

When asked about the possible sale of the old refineries, Ojulari said, “I can’t say that now. But what we are saying is that sale is not out of the question. But all the options are on the table. But that decision will be based on the outcome of the review.”

“For the cost of crude production, there’s a capital cost and there are the operating costs,” he said.

“The operating cost right now in Nigeria is hovering over $20 per barrel, which is quite high.

“Part of that is because of the investment we’ve had to make in terms of security of our pipelines, which as you know, today we have 100 percent availability of our pipelines. That came out of significant investment.

“So we believe with time, with stability, that cost will start going down, but for now it’s somewhere between $25 and $30 a barrel.”

Ojulari added that by the end of the year, the country plans to increase oil output to 1.9 million barrels per day (bpd).