Nigeria turns to Chinese firms in $25bn quest to revive Port Harcourt and Warri refineries

Key facts

• NNPC signed a MoU with Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd on Monday in Jiaxing City, China.
• The Port Harcourt and Warri refineries have a combined nameplate capacity that could significantly reduce Nigeria's dependence on imported refined products.
• Nigeria has spent over ₦11 trillion ($25 billion) on failed refinery rehabilitation since 2010.
• The refineries have consumed more than $2.4 billion in public funds without producing meaningful refined fuel output.
• NNPC Group CEO Bashir Bayo Ojulari, Sanjiang Chairman Guan Jianzhong, and Xinganchen Chairman Bill Bi signed the three-way accord.
• The agreement aims to complete outstanding construction, operate and maintain the facilities, and upgrade them to cleaner, more profitable standards.
• The framework includes expanding petrochemical production and developing gas-based industrial hubs around the refinery complexes.

A new Chinese alliance for Nigeria's ghost refineries

Nigeria’s state oil company has signed a memorandum of understanding with two Chinese industrial firms to revive two government-owned refineries that have collectively consumed more than $2.4 billion in public funds without producing a meaningful drop in refined fuel output. The agreement, signed in Jiaxing City on China’s eastern seaboard, ties the Nigerian National Petroleum Company Limited (NNPC) to Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd under a framework described as a potential Technical Equity Partnership (TEP). NNPC Group Chief Executive Bashir Bayo Ojulari, Sanjiang Chairman Guan Jianzhong, and Xinganchen Chairman Bill Bi executed the three-way accord.

The refineries at the heart of the deal

The refineries in question, at Port Harcourt in Rivers State and Warri in Delta State, were once the backbone of Nigeria’s domestic fuel supply. Together, they carry a combined nameplate capacity that, if fully operational, would meaningfully reduce the country’s dependence on imported refined products that have drained foreign reserves and kept pump prices volatile. Instead, they have sat largely dormant for years, their rehabilitation contracts cycling through a series of contractors and budget lines without yielding results. The new agreement is the most concrete step yet by NNPC to turn those ghost assets into working infrastructure.

A costly history of failed revamps

Nigeria has spent over ₦11 trillion ($25 billion) on failed refinery rehabilitation efforts since 2010, with previous partnerships plagued by delays and underperformance. The Port Harcourt and Warri refineries alone have absorbed more than $2.4 billion in public funds without producing a meaningful drop in refined fuel output. This track record of failure has embarrassed successive administrations and underscored the country’s chronic inability to process its own crude oil, forcing it to import refined products and exposing its economy to global price shocks.

The terms of the Technical Equity Partnership

Under the terms outlined Monday, the partnership would cover completion of outstanding construction and engineering work at both sites, followed by ongoing operation and maintenance aimed at what NNPC called “best-in-class, sustainable performance.” The framework also contemplates upgrades to push both facilities toward cleaner fuel standards and more profitable product slates, a tacit acknowledgement that Nigeria’s refining infrastructure has lagged behind regional and global regulatory trends. “All parties recognise mutually beneficial opportunities for the development and long-term sustainable profitability of NNPC’s refining assets in Nigeria, and the collective weight required for success,” said Bashir Bayo Ojulari, Group CEO of NNPC Ltd. The agreement includes expanding petrochemical production and developing gas-based industrial hubs around the refinery complexes, signalling a broader shift from basic refining toward integrated energy and industrial ecosystems.

A strategic pivot toward Chinese capital

The move signals a broader strategic pivot toward Chinese industrial capital in a sector that has embarrassed successive administrations for decades. It follows an earlier statement by NNPC in February, when it announced plans to collaborate with a Chinese firm to revive its idle refineries through partnerships with experienced operators rather than contractors. Ojulari said the company would offer equity stakes instead of outright sales, enabling the facilities to become self-financing. This approach marks a departure from previous contractor-led models that failed to deliver results.

What comes next for Nigeria's refining ambitions

The memorandum of understanding is still a framework, and the path from signature to operational refineries is fraught with obstacles. Nigeria’s history of large-scale energy projects is littered with delays, cost overruns, and unfulfilled promises. Yet the involvement of Chinese industrial firms with deep experience in petrochemical construction and operation offers a new variable. If the Technical Equity Partnership succeeds, it could transform Nigeria’s energy landscape, reducing import bills and stabilising fuel prices. If it fails, it will join the long list of rehabilitation efforts that have drained the treasury without lighting a single burner.

The bottom line

• NNPC has signed a MoU with Sanjiang Chemical and Xinganchen to revive the Port Harcourt and Warri refineries under a Technical Equity Partnership.
• Nigeria has spent over $25 billion on failed refinery rehabilitation since 2010, with the two refineries alone consuming $2.4 billion without producing meaningful output.
• The agreement aims to complete construction, operate and maintain the refineries, and upgrade them to cleaner, more profitable standards.
• The partnership includes expanding petrochemical production and developing gas-based industrial hubs, signalling a shift toward integrated energy ecosystems.
• NNPC will offer equity stakes rather than outright sales, a departure from previous contractor-led models.
• Success could reduce Nigeria's dependence on imported refined products and stabilise fuel prices; failure would add to a long history of costly rehabilitation efforts.