Twenty years. Eighteen billion dollars. Zero functional refineries. These numbers capture Nigeria’s greatest industrial tragedy-not engineering failure, but organised impunity. Now, just as Nigerians hoped for closure, the Nigerian National Petroleum Company Limited has signed a fresh Memorandum of Understanding with two Chinese firms-Sanjiang Chemical Company Limited and Xingcheng Industrial Park Operation and Management Company Limited-to ‘accelerate’ the rehabilitation of Port Harcourt and Warri refineries.
Let me be clear: this MoU changes nothing. Worse, the chosen partners cannot do the job.
First, examine the Sanjiang Chemical. It is a legitimate petrochemical producer based in Jiaxing, China, specialising in epoxy ethane and ethylene glycol using light feedstocks. There is no public evidence that Sanjiang has ever built, operated, or managed a full-scale crude oil refinery-let alone facilities as complex as Port Harcourt (210,000 barrels per day) and Warri (125,000 bpd). Processing petrochemical derivatives is not the same as reviving aging refineries burdened by decades of decay. Financial reports also show declining revenues and significant short-term debt. If a company is already under liquidity pressure, how will it shoulder the burden of Nigeria’s most troubled national assets?
Second, Xingcheng Industrial Park is an even greater mismatch. By every corporate record, it is an industrial park and infrastructure management company-essentially a real estate manager. There is no verifiable evidence that it has any experience in petroleum engineering, refinery operations, or hydrocarbon processing. The MoU’s stated ambition to develop gas-based industrial hubs around the refineries may explain why a park manager was brought in, but the core job is rehabilitating and operating actual refineries. That requires a lead partner with proven refinery engineering credentials-a Technip, a Bechtel, a Sinopec Engineering. Xingcheng possesses none of these.
Nowhere in the NNPC’s announcement is there mention of a lead engineering, procurement, and construction firm with global refinery credentials. The statement says the MoU is for a ‘potential Technical Equity Partnership’ and that definitive arrangements will follow ‘subject to customary approvals.’ In plain language: this is an expression of interest, not a binding contract. The terms, financing, and the very identity of who will do the work are all yet to be determined. If the definitive agreement eventually brings in a proper refinery operator, why was that operator not named upfront? If the plan is for Sanjiang and Xingcheng to subcontract the actual work, Nigeria is signing an MoU with middlemen-adding layers of cost and opacity while diluting accountability.
The technical verdict on these refineries is already settled. Kelvin Emmanuel explains that they were built with only secondary distillation capabilities; their profit margin cannot exceed 20 per cent, while break-even requires 40 to 45 per cent. You cannot engineer your way around sixty-year-old assets with fundamental design limitations. The Chinese are not magicians.
But my greatest fear is not technical failure-it is contractual entrapment. Consider Uganda’s Entebbe airport. A $200 million loan from the Chinese Exim Bank required the aviation authority to seek Chinese approval for its annual budgets. All airport revenues were deposited into an escrow account controlled by the lender. Uganda waived sovereign immunity, and disputes would be settled in China under Chinese law. When Uganda tried to renegotiate, the Chinese authorities refused. The airport was never formally seized-effective control was transferred in the fine print. Uganda’s Finance Minister later apologised to parliament: ‘I apologise that we shouldn’t have accepted some of the clauses.’
Then consider Zambia. Over years, Zambia accumulated billions in Chinese loans backed by sovereign guarantees and linked to its copper sector. When copper prices fell, Zambia defaulted in 2020. Chinese lenders became Zambia’s largest bilateral creditor, with $5.7 billion owed. Debt restructuring dragged on for three and a half years because of the number of Chinese creditors. By late 2024, Zambia became the first African country to formally accept China’s yuan for mining taxes and royalties-a direct consequence of being unable to restructure on favourable terms. No asset was seized. But economic leverage and strategic influence transferred systematically. This is the trap Nigeria risks walking into-borrowing against oil assets to fix refineries that have already consumed $18 billion, with a partner whose operational capacity remains unverified.
What must be done? First, no binding agreement with Sanjiang or Xingcheng shall be signed unless the full unredacted MoU is transmitted to the National Assembly within seven days, followed by a public hearing within 30 days, and approved by a two-thirds majority of both houses. Second, no sovereign guarantee, revenue escrow arrangement, budget approval right ceded to any foreign entity, waiver of sovereign immunity, or agreement to foreign jurisdiction shall be included unless every such provision is individually and explicitly approved by the same supermajority after public testimony from the Minister of Finance and independent experts. Third, the Bureau of Public Procurement must certify compliance with the Public Procurement Act. Fourth, NEITI must audit the transaction at every stage.
Beyond these demands, the only honourable exit is transparent, competitive divestment. The Dangote refinery-built with private capital, not state billions-is producing fuel. The NNPC itself announced in December 2025 that it plans to sell stakes in selected oil and gas assets through a formal bidding process. The framework exists. What is missing is political courage. If Sanjiang and Xingcheng are capable, let them bid in an open process. If they cannot win a competitive bid, they should not operate Nigerian refineries. That is not anti-China. It is pro-accountability.
For young Nigerians watching this cycle of waste, the lesson is brutal: your future was traded for contracts that never worked. Selling the refineries will not recover the $18 billion already lost, but it will stop the bleeding. Nigeria tried rehabilitation. Nigeria paid for rehabilitation. Nigeria failed at rehabilitation. To persist is moral negligence. The Chinese MoU is not a solution. It is the same disease in a different bottle-this time, with less convincing actors.