Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Bayo Ojulari, said the company is considering selling some of its refineries as it grapples with challenges in their rehabilitation.

Speaking in an interview with Bloomberg on Thursday at the 9th OPEC International Seminar in Vienna, Austria, Ojulari said a strategic review of NNPC’s refinery operations is underway and expected to be concluded before the end of the year.

He said, “So we’re 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.”

When asked if that could include putting the refineries up for sale, Ojulari said, “But what we’re 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.”

Nigeria has been working to rehabilitate its long-dormant state-owned refineries, including those in Port Harcourt, Warri and Kaduna.

Although the Port Harcourt refinery resumed operations briefly in November 2023, it was shut down again in May for maintenance.

Ojulari attributed some of the setbacks to outdated infrastructure and underperforming technologies.

“So refineries, we made quite a lot of investment over the last several years and brought in a lot of technologies. We’ve been challenged.

“Some of those technologies have not worked as we expected so far. But also, as you know, when you’re refining a very old refinery that has been abandoned for some time, what we’re finding is that it’s becoming a little bit more complicated,” he said.

He also addressed the high cost of oil production in Nigeria, saying operating costs range between $25 and $30 per barrel, partly due to heavy spending on pipeline security.

“For the cost of crude production, there’s a capital cost and there are the operating costs,” he said. “The operating cost right now in Nigeria is hovering over $20 per barrel, which is quite high.

“Part of that is because of the investment we’ve had to make in terms of security of our pipelines, which, as you know, today we have 100 per cent availability of our pipelines. That came out of significant investment.

“So we believe with time, with stability, that cost will start going down, but for now it’s somewhere between $25 and $30 a barrel,” he said.

Despite the challenges, Ojulari said the NNPC is targeting an increase in Nigeria’s oil output to 1.9 million barrels per day by the end of the year. (The PUNCH)