Reported by: Oahimire Omone Precious | Edited by: Oravbiere Osayomore Promise.
The Nigerian National Petroleum Company Limited had barely finished celebrating its latest refinery rescue mission when a bombshell landed on its desk. Dele Oye, former President of the Organised Private Sector and a man who has spent decades scrutinising government contracts, declared that the two Chinese firms picked to fix the Warri and Port Harcourt refineries are walking red flags. One, he alleged, has no track record in refinery turnaround maintenance and is facing financial constraints serious enough to question its ability to mobilise for the project. The other, he said, is not even an oil company; it is a real estate firm. Oye’s allegations, first reported by Nairametrics, have thrown the NNPC’s latest refinery rehabilitation strategy into a fresh storm of controversy, raising urgent questions about due diligence, transparency, and the fate of billions of dollars in public funds.
The Memorandum of Understanding at the centre of the storm was signed in Jiaxing City, China, on April 30, 2026. The agreement brings together NNPC Ltd with Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd under a proposed Technical Equity Partnership framework aimed at revitalising Nigeria’s key refining assets. NNPC’s Group Chief Executive Officer, Bashir Bayo Ojulari, signed the MoU alongside the Chairman of Sanjiang Chemical Company, Guan Jianzhong, and the Chairman of Xingcheng Industrial Park, Bill Bi. The statement released by NNPC’s Chief Corporate Communications Officer, Andy Odeh, described the development as a “critical milestone”. According to the statement, the collaboration is intended to complete outstanding rehabilitation works at both refineries while also taking on their operation and maintenance to ensure efficient, sustainable performance. The plan further includes upgrading the facilities to produce cleaner and more commercially viable petroleum products. The agreement, however, is non‑binding. It reflects an initial commitment to continue discussions in good faith, with final binding arrangements subject to regulatory approvals and the conclusion of detailed negotiations.
But Oye was having none of the celebration. Speaking to Nairametrics, the former OPS chairman delivered a devastating critique, detailing the findings of due diligence conducted on both companies. “One firm has no track record in refinery turnaround maintenance and is facing financial constraints, raising doubts about its capacity to mobilise for the project. The other operates primarily as a real estate company.” He did not mince words, adding that compared with the contractors that failed Nigeria in the past, “both appear less experienced and less qualified.” Oye also noted that the NNPC has remained completely silent on the $1.5 billion reportedly approved for the Warri Refinery rehabilitation, a sum that he argued should be accounted for before any new agreement is signed. The NNPC statement announcing the MoU did not mention how much Nigeria would pay for the new rehabilitation, leaving the public to wonder whether the $1.5 billion had already been spent, and if so, where it went.
The OPS leader is not an outlier. His concerns mirror a growing chorus of scepticism from energy experts, civil society groups, and transparency advocates who see the new MoU as a “recycling of failure.” The Centre for Energy Sector Transparency (CEST), an oil sector reform advocacy group, has slammed the agreement, describing it as a “wasteful recycling of failed strategies” and a “troubling signal of weak accountability in the management of public resources.” In a statement signed by its Executive Director, Dr. Oghenetega Edafe, the group pointed out that the same refineries have already gulped enormous public funds, including $2.39 billion spent under the previous administration on the Port Harcourt and Warri refineries. Edafe noted that the Port Harcourt Refinery was declared operational in November 2024 but was shut down barely six months later, on May 24, 2025, while the Warri Refining and Petrochemical Company was shut down in January, just one month after it was declared operational. “What Nigerians are witnessing is a troubling pattern of policy repetition without reflection. The same refineries that have gulped enormous public funds over the years are once again at the centre of a fresh round of agreements, yet there has been no transparent accounting of what has already been spent or why those investments failed to deliver results,” Edafe said.
The financial history of the refineries is enough to make any taxpayer weep. In March 2021, the Federal Executive Council approved $1.5 billion for the rehabilitation of the Port Harcourt refinery. In August 2021, FEC approved another $1.48 billion for the rehabilitation of the Warri and Kaduna refineries. At the time, the then Minister of State for Petroleum Resources, Timipre Sylva, announced that the Warri refinery would gulp $897,678,800, while the Kaduna refinery would cost $586,902,256. Yet, despite these approvals, Nigeria continued to import refined petroleum products, and the refineries remained largely comatose. The NNPC’s latest MoU does not specify how much Nigeria will pay the Chinese firms. The absence of a price tag is a glaring omission, leaving the public, and indeed the private sector, in the dark about the fiscal implications of this new partnership.
The concerns are not merely financial; they are technical and commercial. Energy expert Kelvin Emmanuel, managing partner at Dairy Hills, told BusinessDay that the refineries’ outdated machinery limits their crack spread to just 20 percent. He added that with a margin of at least 40 to 45 percent required to reach the break‑even point, the project remains commercially unviable. “So, your crack spread is not more than 20 percent. What exactly are you doing? Now they are telling you they are bringing Chinese. The crack spread for that refinery, because of how old the machines are, cannot be more than 20 percent. For you to break even, you need crack spread at least above 40 percent, 45 percent to break even. Those refineries were actually built with secondary distillation,” Emmanuel said. He also reminded Nigerians of an inconvenient history: the same NNPC fought against the sale of the Kaduna Refinery to Chinese investors in 2006. Twenty years later, the state oil firm is now embracing Chinese partners under a technical equity model. “It’s like an anomaly, and it’s confusing that we are bringing the same Chinese back exactly 20 years after they fought against the Chinese taking up the Kaduna Refinery. Maybe if they had allowed them then, they would have figured it out,” he said.
Energy lawyer Ayodele Oni echoed the concerns, noting that while the proposed technical and equity hybrid model could be advantageous, the lack of specific details in the agreement and the government’s track record of expensive, unsuccessful refinery repairs render the deal vulnerable to corruption without the urgent implementation of clear transparency measures and robust protections. “The new arrangement, structured as part technical/part equity, can be an opportunity if structured transparently with enforceable governance and oversight. As currently framed (blank‑slate MoU plus a history of failed, costly state rehabilitation), it presents significant corruption risk unless immediate transparency and strong safeguards are imposed,” Oni said.
The NNPC, however, has remained characteristically tight‑lipped. The company’s statement announcing the MoU did not address any of the due diligence concerns raised by Oye. It did not comment on the alleged lack of refinery maintenance track record of either company. It did not address Xingcheng’s reported real estate focus. And it remained silent on the $1.5 billion question. The NNPC’s Group CEO, Bashir Bayo Ojulari, described the agreement as “a significant milestone, following more than six months of concerted engagement between the technical and management teams of NNPC and the two Chinese partners.” He added that all parties recognise “mutually beneficial opportunities for the development and long-term sustainable profitability of NNPC’s refining assets in Nigeria.” Ojulari stressed that the MoU represents a transition from traditional contractor‑led rehabilitation to a more performance‑driven partnership model anchored on shared risks and returns. But he did not say how much Nigeria would pay, nor did he address the uncomfortable history of failed contracts.
The Organised Private Sector has, for years, pushed for the full privatisation of Nigeria’s state‑owned refineries. Oye himself had previously called for the sell‑off of the facilities after the $2.4 billion repairs proved to be “wobbly.” In June 2025, he told The PUNCH that privatisation was long overdue. “The government should not be involved in running a business, considering its performance in the past,” Oye said. Yet, instead of a sell‑off, Nigerians are now witnessing yet another government‑led rehabilitation attempt, this time with partners whose qualifications are being challenged by the same private sector leader who once called for privatisation.
The stakes are enormous. The refineries are central to Nigeria’s energy security. If the MoU leads to a successful turnaround, it could reduce the nation’s reliance on imported petroleum products, ease pressure on foreign exchange, and create industrial jobs. But if it fails, it will add another chapter to a depressing chronicle of wasted billions and broken promises. With the NNPC silent on the questions raised by Oye and other experts, and with the government yet to order a forensic audit of past expenditures, the path forward remains dangerously unclear. One thing, however, is certain: the can of worms that Dele Oye opened is not going to close on its own. The public has every right to demand answers, and the NNPC has every obligation to provide them.
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