NNPC signs MoU with Chinese firms to revive Port Harcourt, Warri Refineries

By Philippine Duru

philippineobetoduru@gmail.com

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The Nigerian National Petroleum Company Limited has signed a memorandum of understanding (MoU) with two Chinese firms as part of a fresh effort to revive Nigeria’s long-dormant refineries and reduce dependence on imported petroleum products.

The agreement, signed on April 30, 2026, in Jiaxing City, China, involves Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd. It focuses on the rehabilitation and operation of the Port Harcourt and Warri refineries, which have a combined refining capacity of about 335,000 barrels per day.

Under the proposed arrangement, the deal is structured as a Industrial Park Operation and Management Co. Ltd (TEP), a model that could see the Chinese firms take on funding responsibilities, provide technical expertise, and manage day-to-day operations of the facilities. The scope includes completing outstanding rehabilitation work, ensuring efficient operation and maintenance, and exploring expansion opportunities, including petrochemical production.

The move signals a strategic shift by the Nigerian National Petroleum Company Limited away from direct operational control, with plans to assume a non-operating or minority partner role while the foreign partners handle technical and operational functions.

However, the agreement remains at a preliminary stage. As an MoU, it is subject to further negotiations, due diligence, and regulatory approvals before it can become a binding contract.

Nigeria’s state-owned refineries have struggled for decades with underperformance despite significant financial outlays. The Port Harcourt and Warri facilities—alongside the Kaduna refinery—have collectively absorbed billions of dollars in rehabilitation funding over the years with limited output to show.

Previous attempts to restore operations, including a $1.5 billion rehabilitation contract for the Port Harcourt refinery in 2021, failed to deliver sustainable results, prompting a rethink of strategy.

Industry analysts say the new partnership model reflects a growing recognition of the need for experienced international operators to manage complex refining assets, rather than relying solely on government-led interventions.

If successfully implemented, the deal could boost Nigeria’s domestic refining capacity, enhance fuel supply stability, create jobs, and improve the financial performance of the national oil company.

The initiative also aligns with broader reforms under the administration of Bola Ahmed Tinubu aimed at attracting foreign investment and commercialising the country’s oil sector.

Despite the optimism, experts caution that execution risks remain high, citing a history of failed rehabilitation efforts, governance challenges, and operational inefficiencies in the downstream sector. Key details of the agreement—including equity structure, investment size, and timelines—are still being finalised.

For now, the MoU represents a renewed attempt to address one of Nigeria’s most persistent energy challenges, though its success will depend on effective implementation and sustained oversight.