The Nigerian National Petroleum Company Limited (NNPCL) says it is considering selling off state-owned refineries due to persistent challenges in revamping the facilities.
According to Bayo Ojulari, the Group Chief Executive Officer of NNPCL, the company is reassessing its refineries strategy and exploring all options, including potential sale.
Ojulari, In an interview with Bloomberg on Thursday at the final day of the 9th OPEC International Seminar in Vienna, said, “Some of those technologies have not worked as we expected so far.”
He said the company had invested heavily in technologies and rehabilitation efforts, but old refineries pose unique challenges, adding “The review, expected to be concluded by year-end, may result in a new approach to refinery management.”
Ojulari said:”So we are reviewing all our refinery strategies now. We hope before the end of the year, we’ll be able to conclude that review. That review may lead to us doing things slightly differently.
“The NNPCL is considering all options, including potential sale of refineries.”
Ojulari explained that while sale is a possibility, the decision will be based on the review’s outcome.
“But what we are saying is that sale is not out of the question. All the options are on the table, to be frank, but that decision will be based on the outcome of the reviews we’re doing now.”
The national oil company aims to finalize its refineries strategy by the end of the year.
The NNPCL CEO also pointed out the challenges of oil production costs in Nigeria, ranging between $20 and $30 per barrel.
“The operating cost right now in Nigeria is hovering over $20 per barrel, which is quite high.”
Despite these challenges, the country plans to increase oil output to 1.9 million barrels per day (bpd) by year-end.
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