finance
Nigeria Signs Deal With Chinese Firms to Rehabilitate Port Harcourt and Warri Refineries
Nigeria's state oil company NNPC has signed a memorandum of understanding with two Chinese firms for the completion, operation and maintenance of the Port Harcourt and Warri refineries. The agreement follows more than $25 billion spent on previous rehabilitation attempts that failed to restore the facilities to full operation.
May 11, 7:00 PM·1m read1 source
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Nigeria's national oil company, the Nigerian National Petroleum Company Limited (NNPC), has signed a memorandum of understanding with Chinese firms to rehabilitate two of its aging refineries. The NNPC reached the agreement with Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Co.
Ltd. The deal covers the completion, operation and maintenance of the 210,000 barrel-per-day Port Harcourt refinery and the 125,000 barrel-per-day Warri refinery under a technical equity partnership model. The move comes after Nigeria spent more than 11 trillion naira, about $25 billion, on earlier attempts to revamp its aging refineries.
Those previous efforts did not succeed in bringing the facilities back to sustained operation.
Nigeria has turned increasingly to the 650,000 barrel-per-day Dangote Refinery. The privately owned facility has enabled the country to become a net fuel exporter even as crude supply shortages persist at some state facilities. The new agreement with the Chinese partners is intended to address the long-standing operational problems at the Port Harcourt and Warri sites.
Details of the technical equity partnership, including investment amounts and timelines, were not disclosed in the announcement.
Oil prices have risen amid the conflict involving Iran.
Bonny Light crude, Nigeria's benchmark grade, has traded above $110 per barrel. The higher prices are increasing government revenues from oil exports. The Punch newspaper estimated the total cost of past refinery rehabilitation projects at more than $25 billion.
