The group Chief Executive Officer (CEO) of the Nigerian National Petroleum Company (NNPC) Limited, Bayo Ojulari, has hinted on the possibility of selling the Port Harcourt, Warri, and Kaduna refineries.
The NNPC disclosed this in an interview with Bloomberg on the sidelines of the 9th OPEC international seminar in Vienna, Austria.
He said: “So refineries, we made quite a lot of investment over the last several years and brought in a lot of technologies. We’ve been challenged.
“Some of those technologies have not worked as we expected so far. But also, as you know, when you’re refining a very old refinery that has been abandoned for some time, what we’re finding is that it’s becoming a little bit more complicated.
“So we’re reviewing all our refinery strategies now. We hope before the end of the year, we’ll be able to conclude that review. That review may lead to us doing things slightly differently. 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.”
“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).
President of the Dangote Group, Aliko Dangote, had on Thursday expressed skepticism about the refineries working again.
The business mogul disclosed this while hosting members of the Global CEO Africa from the Lagos Business School, after a tour of the Dangote Petroleum Refinery in Lekki, Lagos.
The billionaire said more than 50 percent of his refinery’s production — which was built after late President Umaru Musa Yar’Adua’s administration blocked his bid to buy state refineries — now goes to petrol.
“The refineries that we bought before, which were owned by Nigeria, were doing about 22 percent of PMS. We bought the refineries in January 2007. Then we had to return them to the government because there was a change of government,” he said.
“And the managing director at that time convinced Yar’Adua that the refineries would work.
“They said they just gave them to us as a parting gift or so. And as of today, they have spent about $18 billion on those refineries, and they are still not working. I don’t think and I doubt very much if they will work.”
Dangote emphasised that the turnaround maintenance of the refineries “is like you trying to modernise a car that was built 40 years ago, when technology and everything have changed”.
“Even if you change the engine, the body will not be able to take the shock of that new technology engine,” he said.
The NNPC had on November 26, 2024, announced that the Port Harcourt refinery had officially commenced crude oil processing, but the refinery shut down in May for maintenance.
The national oil firm said the Warri and Kaduna refineries were still undergoing rehabilitation.
The federal government approved $1.5 billion for the rehabilitation of the Port Harcourt refinery in Rivers state in March 2021.
Source @TheNation
