Victor EzejaGroup Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Bayo Ojulari, has lamented about the challenges associated with the rehabilitation of the country’s refineries, hinting at the possibility of selling them off.
The state-owned refineries located in Port Harcourt, Warri and Kaduna have remained moribund for decades, with the Federal Government spending millions of dollars on turnaround maintenance.
Join our WhatsApp ChannelThe Former GCEO, Mele Kyari, had in November 2024 announced the resumption of operations at the Port Harcourt refinery. The NNPC management also announced the re-streaming of the Warri refinery in December 2024, a month after that of the Port Harcourt refinery.
However, the joy of Nigerians was cut short when the refineries were shut down again a few months later over technical glitches affecting their operations.
Ojulari, who spoke in an interview with Bloomberg on the sidelines of the 9th OPEC International Seminar in Vienna, Austria, stated that NNPC is currently reviewing its refinery strategies and intends to finish the review by the end of the year.
According to him, the outcome of the review would determine the next step to take in addressing the challenges with the refineries.
He lamented that NNPCL has, over the years, made a lot of investments in the refineries, including deploying technologies, but reviving them to function at optimal capacity has remained a challenge.
He acknowledged that it is a complex matter trying to revive an old refinery with outdated technology.
“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,” Ojulari stated.
When asked whether the review could result in selling the refineries, Ojulari said: “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,” he added.
Speaking on the OPEC+ deliberation, the NNCPL GCEO said the decision to accelerate the return of barrels to the market was the “right thing to do”.
He also spoke on crude oil and gas production and the security of pipelines in Nigeria.
On crude production, he said the country is working towards building capacity to produce about 2 million barrels per day (bpd) by 2027 and also build gas infrastructure to produce from about 7 billion cubic feet (bcf) per day to about 10bcf by 2027 and grow from that level.
On the average cost of crude, Ojulari said the operating cost in Nigeria currently is hovering around $20 per barrel, which, according to him, is quite high. He said part of the high cost is because of investments in securing the pipelines that had been under constant attacks by criminals, but today, they have drastically reduced.
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“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 a 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.”
He expressed optimism that going forward, security around oil pipelines would continue to improve, giving a boost to oil output.
Ojulari further stated that by the end of the year, NNPCL aims to boost Nigeria’s oil production to 1.9 million barrels per day (bpd).
