NNPC Finally Reacts to Report That Port Harcourt, Warri, Kaduna Refineries May Never Work Again

• Bayo Ojulari, the Group CEO of NNPC, admitted that repairing Nigeria's state-owned refineries has become increasingly difficult
• He noted that refurbishing ageing refineries has proven more complex than anticipated, and selling the refineries remains a potential option
• Additionally, Ojulari revealed that Nigeria's crude oil production costs fluctuate between $20 and $30 per barrel, partly due to the significant investments

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The Nigerian National Petroleum Company (NNPC) Limited's Group Chief Executive Officer, Bayo Ojulari, has admitted that the nation’s state-owned refineries are becoming increasingly difficult to repair.

Ojulari stated that the NNPC is currently reviewing its refinery strategies and plans to complete this evaluation by the end of the year in an interview with Bloomberg on Thursday. He made these statements during the 9th Organization of the Petroleum Exporting Countries (OPEC) International Seminar in Vienna, Austria.

“We’ve invested significantly in the refineries over recent years and introduced various technologies,” Ojulari explained. “However, we have encountered challenges. Some of the technologies have not delivered as expected. Furthermore, refurbishing ageing refineries that have remained idle for a long time has proven to be more complex than anticipated.”

“As a result, we are currently reviewing all aspects of our refinery strategy. We aim to finalise this assessment before the year ends, and the findings may prompt a shift in our approach,” he added.

The Port Harcourt refinery formally resumed processing crude oil on November 26, according to the NNPC. In May, however, the plant was closed for regular maintenance. Meanwhile, the Warri and Kaduna refineries are undergoing restoration.

He added that, as part of the ongoing strategic assessment, NNPC has not ruled out the option of selling the refineries.

“To be honest, selling is still on the table. All options are currently being considered, but any final decision will depend on the outcomes of our current review,” he noted.

Nigeria’s Oil Production Costs Hover Around $20 to $30 Per Barrel

Ojulari further stated that the operating cost of crude oil production in Nigeria currently fluctuates between $20 and $30 per barrel.

“When it comes to crude production, we have both capital and operational expenses. At present, operational costs are slightly above $20 per barrel, which is relatively high,” he said.

He attributed part of this expense to the large sums of money spent safeguarding the nation’s oil pipeline network.

“Today, we have 100% pipeline availability due to these investments,” he explained. “We expect these costs to decline over time as the sector stabilises; but for now, they remain between $25 and $30 per barrel,” he added.

Dangote gives reasons Port Harcourt, Warri, Kaduna refineries

Legit.ng reported that the Nigerian National Petroleum Corporation Limited (NNPCL) has been embroiled in a huge scandal after its attempt to revamp the three refineries failed.

Reports confirm that over $18 billion was allocated and released for the rehabilitation of the Port Harcourt, Warri, and Kaduna refineries.

Despite spending this huge sum, the refineries could still not produce any fuel, leading to calls for an investigation.