Stakeholders in Nigeria’s oil and gas sector are divided over a recent agreement between the Nigerian National Petroleum Company Limited (Nigerian National Petroleum Company Limited) and two Chinese firms for the rehabilitation and operation of the Warri and Port Harcourt refineries, with experts split between optimism and deep scepticism about its prospects.
The deal, which involves Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd, was signed in Jiaxing City, China, as part of a proposed Technical Equity Partnership (TEP) arrangement. It is aimed at completing outstanding rehabilitation works and restoring full operations at Nigeria’s long-dormant refineries.
The facilities involved are the Warri Refining and Petrochemical Company in Warri and the Port Harcourt Refining Company in Port Harcourt, both of which have suffered years of neglect, repeated shutdowns, and failed turnaround maintenance efforts despite billions of dollars in investment over time.
The agreement has generated intense debate within industry circles, particularly over whether it represents a breakthrough for Nigeria’s struggling refining sector or yet another experimental policy that may fail to deliver meaningful results.
Optimism from downstream stakeholders
For many operators in the downstream sector, the partnership is being viewed as a necessary intervention to revive Nigeria’s refining capacity and reduce its heavy dependence on imported petroleum products.
The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Dr Billy Gillis-Harry, described the development as a strategic and timely shift in Nigeria’s refinery rehabilitation approach.
According to him, the introduction of a technical equity partnership model signals a move towards operational efficiency, accountability, and performance-based management-elements he said were lacking in previous rehabilitation efforts.
He argued that Nigeria’s refinery challenges are not just financial but also technical and managerial, insisting that partnering with experienced international firms could help address long-standing inefficiencies.
Gillis-Harry said the initiative could restore confidence in Nigeria’s refining system and help reposition the downstream sector for long-term sustainability. He added that the integration of refining operations with petrochemical and gas-based industrial hubs would create significant economic value.
He further explained that such integration aligns with global best practices where refineries are designed as complex industrial ecosystems rather than standalone facilities.
According to him, the successful rehabilitation of the Warri and Port Harcourt refineries would generate thousands of direct and indirect jobs across engineering, logistics, retail, and support services. He noted that this would help reduce unemployment and improve livelihoods in host communities.
He also highlighted potential macroeconomic benefits, including reduced fuel importation, foreign exchange conservation, naira stability, and increased government revenue from domestic production and exports of refined products.
PETROAN expressed confidence that the initiative, if properly implemented, would improve fuel availability, enhance price stability, and strengthen the entire downstream value chain.
The association also urged the Chinese partners to strictly comply with Nigeria’s Petroleum Industry Act, stressing the importance of transparency, fair labour practices, and inclusive stakeholder engagement.
Despite the optimism expressed by some industry stakeholders, several energy experts have raised serious concerns about the deal, questioning both the technical capacity of the Chinese firms and the broader strategy behind the arrangement.
Energy expert Dan Kunle was particularly critical, arguing that the agreement represents a continuation of failed refinery rehabilitation attempts.
He maintained that the companies involved-Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd-do not have a proven track record in refinery construction or operation.
According to him, both firms are privately owned and primarily involved in petrochemicals and industrial park management, rather than full-scale refinery development.
Kunle insisted that Nigeria should instead pursue a transparent privatisation process under the National Council on Privatisation (NCP), arguing that the refineries should be sold in their current condition to investors capable of making independent decisions on rehabilitation or replacement.
He warned that continued government-led rehabilitation efforts could lead to further financial losses, contract disputes, and delays.
‘The MoU is an exercise in futility,’ he said, adding that Nigeria has repeated similar arrangements over the years without achieving functional refineries.
He also questioned the rationale behind entering into new agreements instead of addressing structural inefficiencies in the sector, describing the move as a distraction from more urgent reforms in oil and gas production.
However, not all experts share the same level of pessimism. Energy analyst and businessman Rasheed Adeleke urged Nigerians to support the initiative while demanding transparency and accountability in implementation.
He acknowledged that Nigeria has experienced repeated failures in refinery rehabilitation but argued that abandoning efforts altogether would not solve the country’s energy challenges.
According to him, the current global oil market volatility and domestic fuel supply pressures make it necessary for Nigeria to explore all viable options for increasing refining capacity.
Adeleke stressed that the success of the partnership would depend on proper oversight, clear contractual obligations, and measurable performance targets.
He added that Nigeria must avoid the mistakes of the past by ensuring that any agreement signed translates into actual production output and not just paper commitments.
The management of the Nigerian National Petroleum Company Limited has defended the agreement, describing it as a significant milestone in efforts to restore Nigeria’s refining assets.
According to the company, the Memorandum of Understanding followed more than six months of technical discussions between its teams and the Chinese partners.
It explained that the proposed Technical Equity Partnership covers completion of outstanding rehabilitation works, operational management, maintenance, and potential expansion into petrochemical and gas-based industrial projects.
The company added that the arrangement is designed to ensure long-term sustainability and profitability of Nigeria’s refineries.
It further stated that the agreement is still subject to regulatory approvals and final investment decisions, emphasising that all parties are committed to progressing in good faith.