After Squandering $25B In Refinery Overhauls, Nigeria Turns To Chinese Firms
Reuters Survey Shows OPEC Oil Output At 26-Year Low Amid Iran War Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.
After a series of failed and costly attempts to revamp its aging refineries, Nigeria’s national oil company, the Nigerian National Petroleum Company Limited (NNPC), has signed a new agreement with Chinese firms to revive its moribund facilities.
The NNPC has signed a Memorandum of Understanding (MoU) with Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Co.
Ltd for the completion, operation and maintenance of the Port Harcourt (210,000 bpd) and Warri (125,000 bpd) refineries under a Technical Equity Partnership model.
According toestimatesby The Punch, Nigeria spent more than ?11 trillion (about $25 billion) between 2010 and 2023 on refinery rehabilitation projects, yet the facilities remain largely unreliable.
The Port Harcourt refinery briefly restarted in late 2024 but was shut down again by May 2025 due to performance issues.
Nigeria has chosen to walk away from purely contractor-led repairs to a Technical Equity Partnership (TEP) model wherein partners share technical expertise and financial risk.
TEP is a collaborative business model where a partner provides both specialized technical expertise and equity capital to a project or company, rather than just acting as a contractor or pure financier.
This model is frequently used in large-scale industrial projects such as oil refinery rehabilitations or mining operations to ensure the partner has "skin in the game" regarding both the operational success and the financial performance of the venture.
Related: Reuters Survey Shows OPEC Oil Output At 26-Year Low Amid Iran War However, industry analysts and energy experts in Nigeria have raised significant concerns regarding the technical expertise of the Chinese firms selected by the NNPC for rehabilitating the Port Harcourt and Warri refineries, pointing out that neither has a known track record in large-scale refinery rehabilitation.
To wit, Sanjiang Chemical Company Limited is a petrochemical firm primarily focused on ethylene oxide, ethylene glycol and surfactants rather than crude refining while Xingcheng (Fuzhou) Industrial Park is focused on industrial park management, investment facilitation and infrastructure development.
Both firms are private entities rather than major Chinese state-owned engineering firms with specialized refinery rehabilitation experience.
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