The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Bayo Ojulari, has revealed that the company is exploring the possibility of divesting some of its refineries as it navigates significant hurdles in its rehabilitation efforts.

In an interview with Bloomberg at the 9th OPEC International Seminar in Vienna, Austria, Ojulari shared that NNPC is currently undertaking a strategic review of its refinery operations. This review is expected to be completed before the year’s end and could lead to some important operational changes.

“We’re reviewing all our refinery strategies now,” Ojulari stated. “We hope that before the end of the year, we’ll have a clear picture. This review might suggest that we do things a little differently.”

When pressed on whether this assessment might include selling the refineries, he responded cautiously yet openly: “Sale is not off the table. All options are on the table, but the final decision will depend on the outcome of our review.”

Nigeria has long been working to rehabilitate its historically dormant state-owned refineries, located in Port Harcourt, Warri, and Kaduna. The Port Harcourt refinery, for instance, briefly resumed operations in November 2023 but was subsequently shut down in May for maintenance.

Ojulari attributed some of the setbacks to ageing infrastructure and underperforming technologies. “Despite significant investments over the past few years, implementing new technologies in these old refineries has proven more challenging than expected,” he explained. “When you’re working with a refinery that’s been abandoned for some time, things tend to become more complicated.”

He also touched on the high operational costs of oil production in Nigeria. Currently, operating expenses range between $25 and $30 per barrel, largely due to intensive spending on pipeline security.

“For crude production, there are both capital and operational costs,” he said. “The operating costs in Nigeria are currently around $20 per barrel, which is quite high. A big part of that is due to the investments we’ve had to make to secure our pipelines. Currently, we have 100% pipeline availability, thanks to significant investment.”

Ojulari is optimistic that with ongoing stability and continued investment, these costs will gradually decrease. “We believe that as conditions improve, the costs will come down. But for now, they remain in the $25 to $30 per barrel range.”