…Anonymous NNPCL Official: Deal Exploratory, No Financial Commitment
By Chike Ofili
The Nigeria Employers’ Consultative Association (NECA) has sounded the alarm over what it described as Nigeria’s endless and wasteful refinery rehabilitation culture. This comes barely three days after the Nigerian National Petroleum Company Ltd (NNPCL)signed a Memorandum of Understanding (MoU) with two Chinese firms for the revival and expansion of the Port Harcourt and Warri refineries.
The employers’ body warned that the country risks plunging deeper into another cycle of opaque spending and failed refinery promises despite more than $25 billion allegedly expended on turnaround maintenance and rehabilitation projects over the past decade without meaningful refining output.
Director-General of NECA, Adewale-Smatt Oyerinde, said the government could no longer justify pouring public funds into state-owned refineries that have repeatedly failed to function sustainably despite huge investments.
In a statement on Sunday, Oyerinde questioned the rationale behind the latest agreement signed between NNPCL and the Chinese firms, insisting that Nigerians deserve answers over past refinery expenditures before any new commitments are entertained.
According to him, between 2010 and 2023 alone, Nigeria reportedly spent over N11 trillion, estimated at about $25 billion, on refinery rehabilitation, maintenance, and turnaround programmes, yet the facilities remain largely non-functional.
“The gamble of over $1.5 billion on the Port Harcourt refinery in March 2021 is still fresh in the minds of Nigerians. Despite claims of 90 per cent readiness by 2026, the facility has not produced sufficient refined products on a sustainable basis,” he said.
Oyerinde recalled repeated rehabilitation exercises spanning the 1990s, 2000-2010, 2012-2015, and 2016-2021, all of which ended in massive spending with little or no operational success.
He argued that rather than continue what he called endless turnaround maintenance programmes, the government should prioritise privatisation or concession of the refineries under transparent commercial arrangements.
“While we note that the nation desperately needs functional refineries, we cannot ignore the decade-long pattern of billion-dollar rehabilitation contracts that have delivered zero sustained refining output. It will be unpatriotic to endorse another opaque deal while questions on past spending remain unanswered,” he stated.
The NECA boss further demanded public disclosure of audit reports, expenditure details on previous refinery projects, and clarity on the structure of the newly proposed “technical equity partnerships” with the Chinese firms.
He also questioned the guarantees being put in place to prevent another round of delays, cost overruns, and refinery shutdowns that have characterised past interventions.
“Nigerian businesses have paid the price for energy insecurity for over 30 years through high production costs, forex losses on fuel imports, and massive job losses. It will be unpatriotic to clap for another MoU while about $25 billion from past revamps produced almost zero result,” he added.
Amid mounting concerns, an unnamed NNPC official sought to downplay fears surrounding the agreement, insisting that the MoU signed with the Chinese firms was only a preliminary framework for exploring areas of collaboration and not a binding financial commitment.
The official maintained that no fresh government funds had been committed to refinery rehabilitation under the arrangement.
The “official” was quoted by the media as saying that discussions under the MoU would cover financing models, operations and maintenance support, refinery expansion, petrochemical projects, and gas-based industrial initiatives.
“What we signed is not an award of contract. It does not commit NNPC Limited to any fresh rehabilitation expenditure. A lot of false narratives have emerged suggesting that the company has already committed huge sums or entered another spending cycle. That is completely incorrect,” the official reportedly said.
However, economic expert and Executive Director of the Africa International Trade and Commerce Research, Dr. Sand Mba-Kalu, dismissed attempts to reduce public scrutiny around the deal, insisting that the country’s refinery history makes full transparency non-negotiable.
Speaking in Abuja on Sunday, Mba-Kalu warned that unless the latest arrangement is backed by strict commercial discipline, institutional safeguards and independent oversight, it could end like previous failed refinery interventions.
The latest MoU involves Chinese firms Sanjiang Chemical Company Ltd. and Xingcheng (Fuzhou) Industrial Park Operation and Management Company Ltd., and seeks to establish a Technical Equity Partnership for the Port Harcourt and Warri refineries.
The Federal Government had reportedly spent about $2.39 billion rehabilitating the two facilities under the last administration.
Although the Port Harcourt refinery briefly resumed operations in November 2024, activities were suspended again in May 2025 after NNPC disclosed that internal reviews showed the facilities were operating at monumental losses.
Mba-Kalu said the critical issue was not foreign participation but whether Nigeria now has the commercial and accountability framework to guarantee results.
“The proposed Technical Equity Partnership may be a rational option if it introduces credible partners with proven engineering competence, financing capacity, and operational discipline tied directly to refinery performance,” he said.
He demanded public disclosure of financing obligations, revenue-sharing terms, performance benchmarks, penalty clauses, and exit conditions tied to the partnership.
The economist also called for quarterly accountability reports from NNPCL, detailing refinery output, operational downtime, revenue generation, and capital expenditure.
According to him, the arrangement must include technology transfer, local capacity development, and protection from political interference and opaque procurement systems.
“If political interference continues, even the best technical partner will fail,” he warned.
Mba-Kalu further recommended an independent audit of previous refinery rehabilitation projects to determine why past interventions failed and whether any officials were ever held accountable for the billions spent without results.