Experts Advise NNPC on Things To Do Before Selling PH, Warri, Other Refineries

• Experts have advised the NNPC to approach the potential sale of its refineries strategically
• experts believe that privatisation, if necessary, should be done through transparent and competitive processes
• The experts also caution that a change in the business model is crucial for the success of the refineries

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

The National Petroleum Company Limited (NNPCL) has been advised by experts to use strategic judgment and foresight in the event that it decides to sell the four refineries under its control.

This followed remarks made by NNPCL Group Chief Executive Officer Bayo Ojulari in an interview with Bloomberg, who stated that the business is now reviewing the refineries' plans and may complete the evaluation by the end of the year.

However, the experts stated that the decision should not be made in a hurry or out of emotion, since this might endanger Nigeria's energy security while it is in the hands of friends.

Experts react

According to Prof. Wumi Iledare, Professor Emeritus of Petroleum Economics & Director, Emmanuel Egbogah Foundation, who spoke to Daily Trust, NNPC Limited has the legal authority to sell its assets as a commercial entity under the Petroleum Industry Act (PIA) 2021, but any sale of Nigeria's state-owned refineries must be done strategically and not in a hurry or out of emotion.

He claimed that although the refineries in Port Harcourt, Warri, and Kaduna have continuously performed poorly, the problem has never been ownership because the inefficiency is the result of institutional flaws and bad governance.

“Selling these assets outright, without addressing the fundamental challenges that crippled them, risks repeating the mistakes of the past and jeopardizing Nigeria’s energy security. Privatization, if it becomes necessary, should not translate into elite capture or unchecked monopoly.

“The process must be transparent, competitive, and structured to serve the public interest. A hybrid model such as performance-based concessions, public-private partnerships, or equity restructuring could offer a more prudent path. These alternatives align with the commercial ethos of the PIA and allow for accountability and performance tracking.”

He added that letting go of these assets may eventually be the right course, but it must be done strategically, not symbolically.

According to Prof. Dayo Ayoade mni, an expert in energy law at the University of Lagos, the CEO of NNPC Limited is appropriate, but what's really intriguing is that they are still discussing the possibility of a sale.

According to him, the refineries have never truly operated to their full potential and are in a deteriorating state, and the NNPC has wasted almost 18 billion dollars on them.

According to him, since NNPC Limited is essentially a private corporation, it is time to review its holdings, sell off any that aren't needed, and put money into assets that could boost their bottom line.

“It’s very interesting looking ahead because I know that the unions will fight because there’s nobody who invests in those refineries without sacking most of those redundant staff.

According to Dr. Muda Yusuf, Chief Executive Officer of the Centre for Promotion of Private Enterprise (CPPE), the refineries' chances of operating effectively and competitively are relatively slim due to their age, technology, and ability to compete, particularly in view of the current increase in domestic production from Dangote.

“The prospect is even dimmer if the management continues to be in the hands of the NNPC. Look at how much we have spent trying to resuscitate the refineries. We are talking of billions of dollars, which ordinarily could have been used to even build new refineries. And yet, there have been no results. So fundamentally, if the business model remains as it is, there is no way it can work.

NNPC speaks on plans for PH, other refineries

Legit.ng reported that Bayo Ojulari, the Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC), has revealed that there is ongoing consideration to sell some of the national refineries.

According to him, there are serious challenges in getting them to work efficiently despite rehabilitation efforts.

Bloomberg reports that Ojulari hinted at the decision while speaking at the 9th OPEC International Seminar in Vienna.

Source: Legit.ng