Bayo Ojulari, the Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, has acknowledged that efforts to rehabilitate the country’s state-owned refineries are becoming increasingly challenging.
In an interview with Bloomberg on Thursday, Ojulari revealed that NNPC is currently reassessing its refinery strategies and intends to complete this review by the end of the year.
He made these remarks on the sidelines of the 9th Organisation of the Petroleum Exporting Countries (OPEC) International Seminar held in Vienna, Austria.
“We’ve invested significantly in the refineries over recent years and introduced various technologies,” Ojulari explained. “However, we have encountered challenges.”
“Some of the technologies have not delivered as expected. Furthermore, refurbishing ageing refineries that have remained idle for a long time has proven to be more complex than anticipated.”
“As a result, we are currently reviewing all aspects of our refinery strategy. We aim to finalise this assessment before the year ends, and the findings may prompt a shift in our approach,” he added.
On 26 November, NNPC announced that the Port Harcourt refinery had officially resumed crude oil processing. However, the facility was subsequently shut down in May for routine maintenance.
Meanwhile, the rehabilitation of the Warri and Kaduna refineries is still ongoing.
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In addition, stated that NNPC has not ruled out the possibility of selling the refineries as part of the ongoing strategic review.
“To be honest, selling is not off the table. All options are currently being considered, but any final decision will depend on the outcomes of our current review,” he noted.
‘Nigeria’s Oil Production Costs Hover Around $20 to $30 Per Barrel’
Ojulari further disclosed that the operational cost of crude oil production in Nigeria currently ranges between $20 and $30 per barrel.
“When it comes to crude production, we have both capital and operational expenses. At present, operational costs are slightly above $20 per barrel, which is relatively high,” he said.
He attributed part of this cost to the significant investments made to secure the country’s oil pipeline infrastructure. “Today, we have 100 percent pipeline availability due to these investments.”
“We expect these costs to decline over time as the sector stabilises. But for now, they remain between $25 and $30 per barrel,” he said.
Ojulari concluded by stating that Nigeria is targeting a crude oil production level of 1.9 million barrels per day (bpd) by the end of the year.
