The Nigerian National Petroleum Company Limited (NNPCL), has announced plans to hand over the operations and maintenance of the Warri Refining and Petrochemical Company and the Kaduna Refining and Petrochemical Company to private operators. This decision is part of NNPCL’s ongoing efforts to revitalise the country’s struggling oil and gas sector.
The NNPCL disclosed its intention to engage reputable and credible Operations and Maintenance (O&M) companies to take over the management of the two refineries. This was announced in an official statement released on Friday through the company’s social media platforms.
The Warri refinery, located in Delta State, and the Kaduna refinery in Kaduna State, have long been central to Nigeria’s oil refining capabilities. However, these facilities have faced challenges over the years, including frequent shutdowns, outdated technology, and operational inefficiencies, leading to a significant shortfall in domestic petroleum product supply. The NNPCL’s decision to bring in private operators is seen as a crucial step toward revitalising these critical assets.
The Warri Refining and Petrochemical Company was commissioned in 1978 and has a nameplate distillation capacity of 125,000 barrels per day (bpd). The complex includes a petrochemical plant, which was added in 1988, with production capacities of 13,000 metric tons per annum (MTA) of polypropylene and 18,000 MTA of carbon black. This refinery was designed to meet the petroleum product needs of markets in the southern and southwestern regions of Nigeria, playing a crucial role in the nation’s energy supply chain.
On the other hand, the Kaduna Refining and Petrochemical Company was commissioned in 1980, initially with a capacity of 50,000 bpd. This was later expanded in 1983 to 100,000 bpd with the addition of a second crude train dedicated to the production of lubricating oils. Further expansion in 1986 increased the capacity of the first crude train to 60,000 bpd, bringing the current nameplate capacity of the refinery to 110,000 bpd. The Kaduna refinery was established primarily to serve the petroleum product needs of Northern Nigeria.
Despite their significant capacities, both refineries have struggled to meet Nigeria’s domestic demand for refined petroleum products. Years of underinvestment, mismanagement, and lack of regular maintenance have plagued these facilities, leading to frequent shutdowns and underperformance. As a result, Nigeria, despite being one of the largest crude oil producers in the world, has been heavily reliant on imported refined products to meet its energy needs.
The inefficiencies of the refineries have also had a considerable impact on the Nigerian economy, contributing to the scarcity of petroleum products and the high cost of fuel. This situation has fuelled widespread calls for the government to either fully privatise these refineries or adopt a Public-Private Partnership (PPP) model to enhance their operations.
The decision to hand over the refineries to private operators is part of a broader strategy by the NNPCL to turn around the fortunes of Nigeria’s oil and gas sector. The company has been working on several initiatives to improve its operations, including the ongoing rehabilitation of the country’s four major refineries: Warri, Kaduna, Port Harcourt, and the recently added Dangote Refinery.
In recent years, the NNPCL has been under pressure to reform the oil and gas sector, which has been marred by inefficiencies, corruption, and declining production.
