Warri Refinery undergoes overhaul; will not be sold – NNPC CHINESE technical partners have started a comprehensive review of Warri Refining and Petrochemical Company as the Nigerian National Petroleum Company Limited (NNPC Ltd.) revives a new strategy aimed at repositioning the refinery for sustainable operations and return to long-term commercial profitability.
This latest effort aims to make the refinery commercially viable again instead of being disposed of, a prospect the national oil company rejects. NNPC says a team of 35 engineers from Chinese Sanjiang Chemical Company and New Future Group, have begun on-the-ground evaluation of the refinery to assess its current condition, estimate repair, upgrade and investment requirements ahead of a final investment decision.
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The review, according to the company, is expected to form the basis for a new commercial operational model, with a focus on increased efficiency, the introduction of petrochemical production and the facility’s financial sustainability.
NNPC Group Chief Executive Officer, Mr. Mele Kyari, said the technical review and assessment was a major step in the company’s drive to reposition Warri Refinery as a viable and commercially driven national asset rather than sell it. Mr. Kyari stressed that the refinery would not be sold as scrap, noting its strategic importance and extant infrastructure, which make it attractive to international investors.
In a statement, NNPC noted that the partnership with the Chinese technical partners will go beyond mere repairs, but will also cover the modernization of refinery operations, increase in the output of petrochemical products, and development of industrial gas opportunities in the area.
The stakeholders are optimistic that the partnership could significantly enhance the operational performance of the refinery while reinforcing Nigeria’s efforts to bolster domestic refining capabilities.
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The ongoing review follows an MoU signed between NNPC Ltd and its Chinese partners early this year, on exploring a technical equity partnership for the rehabilitation, operation and expansion of both Warri and Port Harcourt refineries.
The intention was to leverage foreign technical and operational expertise with private sector funding to make these state-owned refineries become efficient and commercially viable business entities.
Warri Refinery which has a refining capacity of 125,000 barrels per day has suffered several shutdowns over the years even with repeated rehabilitation attempts by the national oil company. NNPC, however said, it is confident that this new approach with a long-term commercial framework and global technical support, represents a better prospect for a return to profitability.
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Industry analysts say the outcome of the Chinese-led assessment is expected to complement other private sector investments coming into Nigeria’s downstream sector and would further reduce the country’s over-reliance on importation of refined petroleum products.
If successful, this development will strengthen domestic petrochemical production capacity and support industrial growth in the country.
