For nearly three decades, Nigeria’s state refineries have been less of an industrial asset and more of a financial sinkhole. Since 1999, successive administrations have poured over $5.3 billion into “Turnaround Maintenance” (TAM), yet the taps remain dry.
The legacy of waste is staggering. Under the Obasanjo era, $800 million vanished with little impact. The Yar’Adua and Jonathan years saw another $1.6 billion committed, while the Buhari administration approved a massive $2.9 billion. Despite these injections, the Port Harcourt refinery—declared operational in late 2024—shuttered again within six months.
This history of failure is currently under the microscope of the Economic and Financial Crimes Commission (EFCC). The agency is probing an alleged $7.2 billion fraud linked to these failed rehabilitations. High-ranking former officials, including ex-Group CEO Mele Kyari, former Chief Financial Officer Umar Ajiya Isa, and past refinery MDs like Ahmed Adamu Dikko and Ibrahim Onoja, have faced questioning over the disbursement of funds that produced no fuel.
Current NNPC GCEO, Bashir Bayo Ojulari, is now attempting to pivot away from this culture of contractor-led waste.
On April 30th, The NNPC signed a Memorandum of Understanding with Chinese giants Sanjiang Chemical Company and Xinganchen Industrial Park to introduce a Technical Equity Partnership.
Unlike the old “fix-and-fail” contracts, this model requires the Chinese partners to hold equity. Their profits are tied to actual production, not just showing up for repairs. By transferring operational risk to private hands, Ojulari hopes to transform the NNPC from a “refinery racket” into a commercial entity.
For a nation that has spent 27 years importing its own prosperity at a high cost to the Naira, this shift is more than a policy change—it is a desperate attempt to plug a multi-billion dollar drainpipe that has bled the treasury for a long time.
However, recent assessments of the MoU shows both Chinese companies lack the capacity to revive a refinery, as their past records shows they’ve never actually rehabilitated any crude oil refinery—such as the Warri, portharcourt refinery.
The first partner in the MoU, Sanjiang Chemical Company limited, is a privately owned manufacturer in the chemical sector, with core expertise in downstream petrochemical derivatives rather than upstream crude oil refining.
Conversely, Xingcheng industrial park and management co. Ltd, operates as a real estate and facility management firm; with no records in petroleum engineering or crude oil refining.
Whether the flares at Port Harcourt and Warri will finally stay lit remains the ultimate test of this new strategy.
