The Nigerian National Petroleum Company Limited (NNPC) has unveiled a major shift in its refinery financing strategy, announcing that the Port Harcourt and Warri refineries will no longer rely on loans backed by crude oil production. Instead, the national oil company is adopting a performance-driven funding model designed to make the facilities financially independent and commercially sustainable. The move signals a new chapter in Nigeria’s efforts to revive its struggling refining sector and reduce dependence on government-backed support.
Speaking at the Nigeria Oil and Gas Conference in Abuja, NNPC Group Chief Executive Officer, Bayo Ojulari, said the company is determined to ensure that the refineries operate as profitable businesses capable of attracting financing based on their own performance. According to him, future investments and funding will be tied directly to operational efficiency, productivity, and profitability rather than crude oil volumes. He stressed that the era of borrowing against oil production to fund refinery operations is coming to an end.
Ojulari explained that NNPC has already begun overhauling its investment portfolio by removing projects that lack clear financing structures and profitability prospects. He noted that the company’s past challenges were partly driven by infrastructure projects that failed to generate sustainable returns. As part of the restructuring, NNPC is introducing innovative financing mechanisms that allow projects to stand on their own commercial strength, reducing financial risks while encouraging accountability and long-term growth.
One example of this approach is the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project, which is being financed through a model known as “Project Nexus.” According to Ojulari, the financing is linked to the pipeline’s expected throughput rather than external crude oil revenues. The same principle, he said, will guide the future of Nigeria’s refineries, with partnerships spanning engineering, logistics, technology, and marketing expected to play a crucial role in transforming the facilities into competitive energy assets.
The announcement comes as NNPC continues discussions with Chinese investors over a proposed technical equity partnership for the Port Harcourt and Warri refineries. The deal could see foreign partners acquire a majority stake in the facilities and support ongoing rehabilitation, expansion, and petrochemical integration projects. While skepticism remains among some Nigerians over whether the refineries can return to full productivity, Ojulari remains confident that the facilities can once again become profitable, sustainable businesses capable of generating value, attracting investors, and strengthening Nigeria’s energy security.
source: punch