NNPC to engage private firm to run refinery, express interest in NLNG model

The Nigerian National Petroleum Corporation, NNPC, has indicated that it would seek private investors to run the nation’s refineries.

The oil refining asset is currently under rehabilitation. However, NNPC has indicated it would not be responsible for operation after completion.

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has revealed the plan.

Dr. Kennie Obateru, Group General Manager, Group Public Affairs Division, in a statement in Abuja on Wednesday, said Kyari revealed this as a special guest on a TV programme.

He said that after completion of the ongoing rehabilitation exercise, the services of a company would be procured to manage the plants on an Operations and Maintenance (O & M) basis.


“We are going to get an O&M contract, NNPC won’t run it. We are going to get a firm that will guarantee that this plant would run for some time.

“”We want to try a different model of getting this refinery to run. And we are going to apply this process for the running of the other two refineries,” he said.

Kyari explained that the plan, ultimately was to get private partners to invest in the refineries and get them to run on the NLNG model where the shareholders would be free to decide the fate of the refineries going forward.

He stated that this model, which was totally different from previous approach, would guarantee the desired outcome for the refineries.

He added that the decision to finally end the fuel subsidy regime was in the interest of ordinary Nigerians.

According to him, this would free up funds for the various tiers of government to develop basic infrastructure in the education, health, transport, and other sectors.

“Subsidy is elitist because it is the elites that benefit from it. They are the ones that have SUVs, four, five cars in their garages.

“The masses should be the ones to benefit. There are many things wrong with the under-recovery because it makes us to supply more than is needed.

“This makes the under-recovery to be bloated because we unwittingly subsidize fuel for the whole of West Africa. That has to stop,” he said.

He explained that the removal of subsidy would automatically correct the distortions it created in the market such as products arbitrage and smuggling.

He said that it would also provide the needed impetus for the NNPC to establish retail outlets in neighbouring countries.

On demand for reduction in the price of kerosene, he said the corporation’s focus was rather on how to migrate all those who were still using kerosene for domestic cooking to the use of Liquefied Petroleum Gas (LPG) or cooking gas.

According to him, apart from LPG being a cheaper fuel than kerosene, it is also safer and more environment-friendly.

He said the Minister of State for Petroleum Resources, Chief Timipre Sylva, was championing policies to deepen the adoption of LPG for domestic consumption.

Kyari added that widespread adoption of LPG usage was the best solution to kerosene supply challenges in the long term.

On the situation with global crude oil price and supply, the GMD said things were shaping up.

“Crude oil price is improving by the day. Last week, it was $15 per barrel. Today, it is $32.79 per barrel.

“We believe the ongoing engagements between global oil producers will bring back demand and once that happens, the market will balance and fully recover by year-end,” he stated.

On the fight against COVID-19, Kyari, who put the current total donations by players in the Oil and Gas Industry at N21 billion, said the sector was obliged to support the Federal Government in its efforts to bring relief to Nigerians.

He maintained that the donations were in kind and were designed to address three key areas of provision of hospital consumables, including face masks, test kits, among others.

Others are is provision of support services and facilities for patients, among which are beds, ventilators, among others; and provision and upgrade of health infrastructure that will outlive the COVID-19 pandemic.

Kyari said the strategic interventions of the Oil and Gas Industry toward the fight against COVID-19 were aligned with the objectives of the Presidential Task force on Covid-19.

NNPC to engage private firm to run refinery, express interest in NLNG model

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