The Group Chief Executive Officer of NNPC Limited, Bayo Ojulari, has shed light on the selection of two Chinese firms, Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd, for a potential technical equity partnership to revive and operate Nigeria's Port Harcourt and Warri refineries. This decision was made after a thorough nine-month process that involved considering more than 50 potential partners.
According to Mr. Ojulari, the selection process was rigorous and competitive, with the list of potential partners eventually narrowed down to about 20. The NNPC Limited signed a Memorandum of Understanding (MoU) with the two Chinese companies in May for collaboration through a potential technical equity partnership to support the completion and operation of the Port Harcourt and Warri refineries. The proposed arrangement aims to focus on completing outstanding work at the two refineries and ensuring efficient operation and maintenance.
Mr. Ojulari addressed concerns over the capacity and track record of the Chinese companies, stating that NNPC conducted independent due diligence on them. He personally visited their facilities in China alongside members of the NNPC team and board, and was satisfied with their operations and technical expertise. The companies are involved in the operation of a major petrochemical plant in China and have access to significant technical expertise.
The NNPC boss defended the companies against concerns about their technical capacity, saying that they have a stake in one of China's major refineries and have board-level representation, giving them access to technical expertise and industry talent. Mr. Ojulari emphasized that NNPC was deliberately seeking a partner with a long-term stake in the success of the refineries rather than a contractor whose involvement would end after payment.
Mr. Ojulari cautioned against what he described as misleading reports and comments about NNPC's refinery strategy, stating that some people may be unhappy with the company's decisions. He urged Nigerians to scrutinize such claims rather than accepting them at face value, citing his 35 years of experience in the oil industry as part of the basis for his assessment of the companies and the refinery rehabilitation strategy.
Nigeria has four state-run refineries, including two in Port Harcourt, which together form the Port Harcourt Refining Company, with a combined installed capacity of 210,000 barrels per day (bpd). The Kaduna Refining and Petrochemical Company Limited has an installed capacity of 110,000 bpd, while the Warri Refining and Petrochemical Company has an installed capacity of 125,000 bpd.
The NNPC boss said the company would continue to examine claims about the project and verify the credibility of those making them. With the refinery rehabilitation efforts underway, Nigerians will be watching closely to see the impact of this partnership on the country's oil industry.
Key points
- NNPC Limited's Group CEO Bayo Ojulari says two Chinese companies were selected for a potential technical equity partnership to revive Nigeria's Port Harcourt and Warri refineries after a nine-month process involving over 50 potential partners.
