NNPC-China refinery partnership; Expert urges transparency, performance-driven process

NNPC-China refinery partnership; Expert urges transparency, performance-driven process

An economic expert, Sand Mba-Kalu, has urged NNPC Limited to ensure transparency, accountability, and robust institutional safeguards in the proposed Technical Equity Partnership for the rehabilitation of state-owned refineries, particularly within the framework of the NNPC-China refinery partnership.

Mba-Kalu, who is also the Executive Director, Africa International Trade and Commerce Research, said this in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja..

He was reacting to the recent Memorandum of Understanding (MoU) signed by the NNPC Ltd. with two Chinese companies for Technical Equity Partnership (TEP) to support completion and operation of the Port Harcourt and Warri refineries.

NAN reports that the MoU, signed with Sanjiang Chemical Company Ltd. and Xingcheng (Fuzhou) Industrial Park Operation and Management Company Ltd. in China is expected to support a potential TEP, covering the two refineries.

The Federal Government had spent 2.39 billion dollars under the previous administration to repair the two refineries.

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Only the Port Harcourt Refinery was completed with production starting in November, 2024. However, it was shut down in May 24, 2025, amidst controversy over the output from the refinery.

The NNPC Ltd. had said that it shut the refineries after internal reviews revealed that they were operating at ‘monumental losses” and destroying value for the country.

Mba-Kalu said the proposed NNPC-China Technical Equity Partnership could become a turning point for Nigeria’s refinery sector if implemented as a genuine commercial and performance-driven arrangement.

The expert decried that Nigeria’s public refineries had over the years become symbols of repeated public expenditure without commensurate economic returns.

He said in spite of billions of dollars spent on turnaround maintenance, rehabilitation contracts and operational restarts, the country still depended heavily on imported petroleum products.

“Against this background, the recent MoU should not be dismissed outright.

The Port Harcourt and Warri refineries have a combined installed capacity of about 335,000 barrels per day, while Nigeria’s total public refining capacity, including Kaduna refinery, is about 445,000 barrels per day,” he said.

“The major issue is not whether Nigeria should engage foreign technical partners, but whether the right institutional, commercial and accountability framework exist to guarantee success,” he said.

He said that Nigerians remained skeptical because previous rehabilitation efforts had produced repeated announcements, commissioning ceremonies and large public spending without sustainable refinery operations.

“This history has weakened public trust.

“The proposed TEP may be a rational option if it introduces credible partners with proven engineering competence, financing capacity, operational discipline and direct commercial exposure to refinery performance,” he said.

The expert added that a technical equity model could prove more effective than conventional turnaround maintenance arrangements if the partners had direct commercial incentives tied to refinery productivity and profitability.

He, however, warned that if the arrangement merely repackaged old contracts under a new structure, it could repeat the failures of the past.

According to him, the NNPC Ltd. and the Federal Government must address critical questions regarding previous rehabilitation projects to build public confidence.

He queried why earlier turnaround maintenance contracts failed, whether post-project assessments were conducted and published, and if any individuals or institutions were held accountable for non-performance.

“What happens to existing contracts and obligations on the Port Harcourt and Warri refineries?

“Without clear answers, Nigerians will see the new MoU as another expensive cycle of promises rather than a credible reform,” he said.

Mba-Kalu, while outlining conditions necessary for the success of the proposed partnership, said the contract terms should be transparent, including details on financing obligations, revenue-sharing arrangements, performance milestones, penalty clauses and exit conditions.

He also advocated independent technical oversight involving refinery engineers, financial experts, procurement specialists, regulators and civil society representatives.

According to him, such a body should periodically publish reports on project progress, delays, technical challenges and operational readiness.

The expert further underscored the need for clearly defined performance benchmarks covering refining output, product quality, environmental compliance and timelines for completion

He said refinery operations should be managed commercially rather than politically, adding that operations must be insulated from election-cycle pressures, patronage, opaque procurement and non-commercial decision-making.

“If political interference continues, even the best technical partner will fail,” he said.

Mba-Kalu also called for quarterly public accountability reports from NNPC Ltd. detailing capital expenditure, refining volumes, downtime, product output and revenue generation.

He added that the partnership should incorporate technology transfer and local capacity development through structured training programmes and participation of Nigerian engineers and suppliers.

The expert further recommended an independent audit of previous refinery rehabilitation efforts to enable the country learn from past failures and strengthen institutional accountability.

“However, without transparency, independent oversight, enforceable milestones and public accountability, it may become another costly episode in Nigeria’s long history of refinery rehabilitation without results,” he said.