NNPC to sell refineries- CEO.
Bayo Ojulari, Group Chief Executive Officer of Nigerian National Petroleum business Limited, stated that the business is considering selling some of its refineries since it faces difficulty in rehabilitation.
Speaking to Bloomberg on Thursday at the 9th OPEC International Seminar in Vienna, Austria, Ojulari stated that a strategic assessment of NNPC’s refinery operations is now underway and is scheduled to be completed by the end of the year.
He stated, “We are currently assessing all of our refinery strategy. We intend to finish the review by the end of the year. That review may cause us to do things slightly differently.”
When asked if this included selling the refineries, Ojulari responded, “But what we’re saying is that sale is not out of the question.
“All the options are on the table, to be frank, but that decision will be based on the outcome of the reviews we’re doing now.”
Nigeria has been actively rehabilitating its state-owned refineries, particularly those in Port Harcourt, Warri, and Kaduna, which have been idle for some time.
The Port Harcourt refinery briefly restarted operations in November 2023, but was shut down again in May for maintenance.
Ojulari blamed some of the setbacks on ageing infrastructure and poor technologies.
“We have made significant investments in refineries over the last several years and have introduced many new technologies.” We have been challenged.
“Some of those technologies have not performed as promised thus far. But, as you know, when you’re refining an ancient refinery that has been abandoned for a long time, things get a little more tricky,” he explained.
He also addressed Nigeria’s high oil production costs, stating that operating costs average between $25 and $30 per barrel, which is attributable in part to excessive spending on pipeline security.
“For the cost of crude production, there’s a capital cost and there are the operating costs,” he informed me. “The current operating cost in Nigeria is over $20 per barrel, which is pretty costly.
“Part of the high operating cost is due to the investment we’ve made in securing our pipelines, which currently have 100 percent availability.” That resulted from a considerable 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,” he told me.
Despite hurdles, Ojulari stated that the NNPC plans to expand Nigeria’s oil output to 1.9 million barrels per day by the end of the year.