NNPC’s new subsidiary targets 250,000bpsd refinery capacity with third party investors  

The Nigerian National Petroleum Corporation (NNPC) has inaugurated a new board for its latest subsidiary, NNPC Greenfield Refinery Limited (NGRL), which is targeting a combined 250,000 barrels per stream day (bpsd) refining capacity working with third party investors to establish greenfield, modular and condensate refineries.

NNPC currently has four existing refineries,  two in Port Harcourt; one in Warri; and one in Kaduna, with combined 445,000 nameplate capacity, but they are still largely moribund, hence the country’s reliance on importation of petroleum products to meet domestic needs for more than two decades.

Mele Kyari, group managing director of NNPC, while inaugurating the board of the new subsidiary, charged its members to explore all available options to bring an end to the current challenge of petroleum products importation in the country.

Nigeria, Africa’s largest oil producer, spends in excess of $10 billion on imports of virtually all its petroleum products needs, despite owning four refineries. The African country also runs a complex fuel subsidy system, where it spends trillions of naira.

Only last June, the national oil company awarded a contract for the repairs and upgrade of the 210,000 bpd Port Harcourt Refinery to Italy’s Tecnimont.

The NNPC Greenfield Refinery would operate as a subsidiary of the corporation. It was set up in December 2020 with a mandate to oversee the establishment and operation of new refineries.

The GMD, who is also the chairman of the NGRL board, challenged members of the board to focus on profitability in order to remain afloat and avoid liquidation.

“As a business, this is a big opportunity for us and this company’s balance sheet must change positively. Going forward, with the Petroleum Industry Act (PIA), I can tell you that if you continue to post negative for three years, you are out. So, there is really no excuse,” Kyari warned the new refinery board members.

He urged the board and management team of the new company to set up a proper structure with the required skills, technology and financing to drive the company’s operations; adding that he was optimistic that the company would be able to achieve its mandate.

“Our company must grow and we can’t do well except we are able to process our production whether it is the liquid or gas. If we don’t monetize it then we have done nothing. This is really a new chapter and we are committed to making it work,” he said.

The NNPC helmsman stated that all the corporation’s initiatives in the areas of new refineries, condensate refineries and equity acquisition in credible private refineries were geared towards ensuring energy security for the country.

Mustapha Yakubu, the alternate chairman of the board and NNPC’s group executive director, refinery and petrochemicals, declared that the operations of the company would be guided by the principles of cost effectiveness in line with the new Petroleum Industry Act (PIA), noting that profitability would be the key focus.

Bege Talson, group general manager, Greenfield Refineries and Project Division (GRPD), and managing director of NGRL, speaking in similar vein, said the division was working with third party investors to establish greenfield, modular and condensate refineries with a combined capacity of 250,000 barrels per stream day (bpsd).

He pledged his team’s commitment to run the company profitably.

Other members of the board include:Umar Ajiya, group executive director, finance & accounts, NNPC; Oluwaseyi Omotowa, managing director, Nigerian Gas Company (NGC); Elizabeth Aliyuda, managing director, NNPC Retail; Muhammad Ali-Zarah, managing director, Nigerian Petroleum Development Company (NPDC); and Tolulope Olubommo as company secretary and legal adviser.