By Opeyemi Adelakun
The Nigerian National Petroleum Company Limited (NNPC) has ended the use of crude oil-backed loans to finance the Port Harcourt and Warri refineries, marking a significant shift in its strategy to reposition the country’s state-owned refining assets.
Under the new policy, the refineries will be expected to operate as commercially viable businesses capable of raising financing based on their operational performance rather than relying on crude oil production as collateral.
NNPC Group Chief Executive Officer, Bayo Ojulari, announced the decision while addressing participants at the Nigeria Oil and Gas Conference in Abuja, describing the move as part of broader reforms to ensure the refineries become financially sustainable.
He said the era of securing loans against future crude production to keep the refineries running had come to an end, adding that future financing would depend on productivity, efficiency and profitability.
According to Ojulari, the company has also begun overhauling its investment portfolio by eliminating projects that lack clear funding structures and commercial viability.
He explained that NNPC is adopting project-based financing for major infrastructure, where investments are backed by each project’s revenue-generating capacity rather than the company’s crude oil output.
The new funding approach, he noted, will also guide the operation of the Port Harcourt, Warri and Kaduna refineries as part of efforts to build sustainable businesses capable of attracting long-term investment.
As part of the restructuring, NNPC is pursuing a technical equity partnership with Chinese firms to complete the rehabilitation and expansion of the Port Harcourt and Warri refineries.
The proposed arrangement is expected to replace the traditional contractor model with long-term equity participation, allowing investors to contribute technical expertise, operations, maintenance and capacity expansion while sharing ownership and governance responsibilities, subject to due diligence.
Ojulari expressed confidence that the reforms would restore the refineries to commercial profitability despite widespread public scepticism over their future.
The latest policy marks one of the most significant changes in NNPC’s refinery financing strategy, as the national oil company seeks to reduce dependence on debt-backed crude production and build a commercially driven downstream sector.
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