After years of failed attempts to get Nigeria’s refineries working, the Nigerian National Petroleum Company Limited (NNPCL) recently signed a Memorandum of Understanding (MoU) with two Chinese firms to support comprehensive rehabilitation of the facilities.
The move has been described as a major regulatory and strategic pivot in Nigeria’s downstream petroleum sector.
The MoU was signed on April 30, 2026, by the Group Chief Executive Officer of NNPC Ltd, Bashir Bayo Ojulari, alongside the Chairman of Sanjiang Chemical Company, Guan Jianzhong, and the Chairman of Xingcheng Industrial Park, Bill Bi.
According to a statement issued by the Chief Corporate Communications Officer of NNPC Ltd, Andy Odeh, the agreement is for collaboration through a potential Technical Equity Partnership in support of the completion and operation of the Port Harcourt and Warri Refineries.
The move has generated nationwide reactions, from Nigerians who raised doubts about the deal yielding any positive results, given the millions of dollars spent in the past on turnaround maintenance, yet the refineries have remained moribund.
Last week, the NNPC GCEO visited the Warri Refining and Petrochemical Company (WRPC), where he unveiled plans for a technical partnership aimed at completing rehabilitation and boosting refining operations at the facility.
Here are the key things to know about the MoU
1. The Core Partners Involved
NNPC Ltd signed the MoU with two specific Chinese entities: Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd. The agreement was executed in Jiaxing City, China.
2. Targeted Assets
The deal focuses explicitly on completing outstanding engineering work, rehabilitating, and operating two of Nigeria’s largest state-owned refineries – Port Harcourt Refinery (with a combined capacity of 210,000 barrels per day) and Warri Refinery (with a capacity of 125,000 barrels per day).
3. Shift to a Technical Equity Partnership (TEP)
Unlike past Turnaround Maintenance (TAM) schemes where the government simply paid contractors, the NNPC GCEO emphasised that the new framework introduces a Technical Equity Partnership. This model functions on shared risks and returns—meaning the Chinese partners’ financial rewards are directly tied to the operational performance and profitability of the refineries.
4. It is an MoU, not a Final Contract
Ojulari stressed that this is an agreement to explore cooperation, not a legally binding final contract. The project has moved into a rigorous evaluation and due diligence phase before any permanent long-term commitments are locked in.
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5. Private Capital Is Funding the Due Diligence
In a structural departure from historical trends, the prospective Chinese partners are bearing the full cost of the technical and commercial assessments. This strategy is designed to keep the pre-contract phase data-driven and insulated from public financial leakages.
6. Beyond Refining: Petrochemical & Gas Hubs
The scope extends far beyond basic fuel refining. The framework contemplates expanding the refineries’ petrochemical capabilities and building co-located, gas-based industrial hubs (including new methanol plants) to increase downstream economic value.
7. Upgrades for Cleaner Fuel Standards
The agreement targets modernizing the aging infrastructure to push both facilities toward cleaner regional fuel benchmarks and higher-value product slates, addressing decades of lagging regulatory compliance.
8. Moving Away from Sunk Public Costs
The strategic pivot comes after traditional government-funded rehabilitation projects swallowed billions of dollars over consecutive administrations with very little sustainable output. Port Harcourt refinery had briefly resumed operations in late 2024 before suffering operational setbacks and a subsequent shutdown on the directive of the NNPC GCEO for a rethink of the management model.
9. Rising Stakeholder Criticism & Skepticism
The deal faces intense domestic scrutiny. Critics, including the Organized Private Sector of Nigeria (OPSN), have publicly questioned the technical track records of the selected firms. Concerns have been raised that Sanjiang is navigating tight credit facilities and lacks global refinery rehabilitation experience, while Xinganchen is primarily viewed as an industrial park manager.
10. Demands for Local Content & Transparency
Labour unions like the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) are systematically reviewing the MoU’s contractual obligations. Simultaneously, local refining associations, such as the Crude Oil Refining Association of Nigeria (CORAN) and marketers, are demanding full compliance with the Petroleum Industry Act (PIA), pushing for host-community engagement and ensuring that the deal doesn’t serve as a “backdoor privatization” that sidelines indigenous capacity.
Victor Ezeja is a Nigerian journalist skilled in producing insightful news analyses, feature stories, and interviews that simplify complex issues and drive informed public discourse. His work combines rigorous research, balanced reporting, and compelling storytelling to highlight developments shaping industries and society. Victor, who holds a Master's Degree in Mass Communication, specializes in energy, aviation, business, and economic reporting. He can be reached via @VICTOREZEJA on X