Relief for Nigerians as NNPCL seals deal with Chinese firm to revive moribund refineries

Hopes of supply diversification and price competition in the domestic fuel market has risen as the Nigerian National Petroleum Company (NNPC) Limited finally pens deals with equity partners to explore a Technical Equity Partnership (TEP) aimed at completing and efficiently running the Port Harcourt and Warri refineries.

The national oil company also posted significant profit after tax (PAT) of N276bn in March 2026, more than doubling its February earnings as rising gas production and improved operational efficiency boosted performance despite persistent pipeline disruptions.

It however reported that crude oil sales dropped to 17.37 million barrels (mbbls) in March. The March crude sales figure represents significant drop by 8.38 mbbls from the 25.75  mbbls recorded in January, and down by 5.48 mbbls from the 22.85 mbbls in February.

The NNPC Limited which shoulders great funding responsibility to the federal, state and local government budgets also declared cumulative statutory payments of N2.89 trillion to the federation account in the first quarter of the year.

In the company’s latest operational updates made available to the public, NNPC Limited declared that it has signed a Memorandum of Understanding (MoU) with Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Company Limited on TEP relating to technical rehabilitation and commercial operation of the Port Harcourt Refining Company (PHRC) and the Warri Refinery and Petrochemical Company (WRPC) Limited.

The agreement, according to NNPC Limited, were signed in Jiaxing City, China at the end of April.

Group Chief Executive Officer, Engr. Bashir Bayo Ojulari signed the MOU for NNPC Limited; Chairman of Sanjiang Chemical Company, Guan Jianzhong; and Chairman of Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd, Bill Bi; signed for their respective companies.

In a statement released from Abuja by Andy Odeh, Chief Corporate Communications Officer of NNPC Ltd, the agreement outlines a framework that focuses on completing outstanding construction work at both refineries, as well as ensuring their efficient operation and maintenance.

The goal is to achieve high-performance, sustainable output while positioning the facilities to meet modern standards.

The collaboration also includes plans for upgrading and expanding the refineries to produce cleaner and more commercially viable products. Beyond refining, the partnership envisions boosting petrochemical production capacity and tapping into gas and downstream opportunities.

This would be achieved through the development of integrated, gas-powered industrial hubs situated alongside the refineries.

Speaking after the signing ceremony, Ojulari described the agreement as a major breakthrough, noting that it came after over six months of intensive discussions between NNPC’s technical and management teams and their Chinese counterparts.

He emphasized that all parties see strong mutual benefits in advancing Nigeria’s refining capabilities and ensuring long-term profitability.

According to him, the partnership brings together the combined expertise and resources necessary to achieve these goals.

Ojulari further explained that the MoU marks a crucial step toward identifying suitable technical equity partners to revive and expand the country’s refining infrastructure, while also unlocking opportunities in petrochemicals and gas-based industries.

The agreement, he added, reflects a shared commitment by all parties to continue discussions in good faith, with final binding arrangements to be concluded later, subject to necessary approvals.

Daily Champion reports that the prevailing agreement brings to conclusion lingering anxiety over the agelong and costly rehabilitation and revival of the key public refineries operated by the national oil company.

When eventually restreamed, the refineries will dilute the current private monopoly in the supply of transportation fuels to the domestic market where Dangote Refinery currently holds sway. Hopes are that the re-entry of NNPC Limited into the local refining fray would also help reduce prices, dismantle the fuel trigger on inflation and boost its operational profitability.

Meanwhile, the company has recorded a profit after tax of N276bn in March 2026, more than doubling its February earnings, as rising gas production and improved operational efficiency boosted performance despite persistent pipeline disruptions.

Details from the company’s latest monthly report published on Monday, showed that revenue climbed to N2.77tn in March, representing a 3.51 per cent increase from February, while crude oil and condensate production rose to 1.56 million barrels per day.

Gas production emerged as the strongest driver of growth, rising to 7,731 million standard cubic feet per day, the highest level recorded in the past 12 months.

Highlighting the performance, the report stated, “This edition records month-on-month growth across key production metrics, with crude oil and condensate output rising to 1.56 mmbopd and gas production climbing to 7,731 mmscf/d.”

An analysis of the figures showed that crude oil output remained flat compared to February at 1.56 million barrels per day but improved from 1.51 million barrels per day recorded in January.

Gas production, on the other hand, rose steadily over the first quarter, increasing from 7,281 mmscf/d in January to 7,458 mmscf/d in February before peaking in March.

The company attributed the improved production levels to operational efficiency, particularly at offshore assets.

It stated, “Production improved compared to the previous month, driven by the early completion of the OML 118 Bonga Turnaround Maintenance, delivered 12 days ahead of schedule.”

However, the report acknowledged that pipeline disruptions significantly impacted output during the period.

NNPC stated, “The Trans Forcados Pipeline outage, resulting from a leak at the Keremor axis, negatively impacted production volumes, leading to curtailments across several assets from February 20 to March 25, alongside other operational challenges.”

Despite these setbacks, the company maintained that it is implementing targeted recovery strategies to stabilize output.

It noted, “NNPC Limited continues to strengthen production resilience by executing restoration plans focused on improving asset reliability, resolving evacuation constraints, and implementing other targeted recovery initiatives.”

Further analysis showed that crude oil sales dropped sharply to 17.37 million barrels in March, down from 22.85 million barrels in February and 25.75 million barrels in January, suggesting that evacuation and logistics challenges persist.

The report emphasized the significance of this performance, stating that gas production for March “reached its highest level in the trailing 12-month period covered by the report.”

Financially, the company recorded strong gains, with profit after tax rising by about 102.94 per cent month-on-month.

The report said, “The report covers key figures, including revenue of N2.774bn (up by 3.51 per cent from the February 2026 report), profit after tax of N276bn (up by approximately 102.94 per cent from the February 2026 report).”

Cumulatively, statutory payments to the Federation reached N2.89tn between January and March 2026.

On infrastructure, NNPC highlighted progress on key gas pipeline projects aimed at boosting supply and supporting power generation.

It disclosed, “On the Ajaokuta-Kaduna-Kano Gas Pipeline, welding of the 24-inch spur line to the Gwagwalada Independent Power Plant has been completed, while significant progress has been recorded for outstanding mainline pre-commissioning works.”

The company added, “For the Obiafu-Obrikom-Oben Gas Pipeline River Niger Crossing, drilling operations continued as scheduled.”

However, downstream indicators remained weak, with petrol availability at NNPC retail stations put at 56 per cent nationwide.

The report, however, cautioned that all figures remain subject to reconciliation.