Fresh details have emerged on the newly signed Memorandum of Understanding between the Nigerian National Petroleum Company Limited and two Chinese firms, Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd, for collaboration through a potential Technical Equity Partnership to support the completion and operation of the Port Harcourt and Warri refineries.

It was gathered exclusively on Sunday that the new arrangement is neither a contract award nor a fresh spending commitment, amid growing public scrutiny over the state-owned refineries. The clarification followed increasing public debate and speculation surrounding the agreement signed by NNPC with the Chinese companies as part of efforts to revamp Nigeria’s long-struggling refineries.

Last Monday, the national oil company announced the signing of a fresh agreement with the two Chinese firms in a move aimed at accelerating the delayed rehabilitation and commercial restart of Nigeria’s refineries, while also opening a new window for technical equity partnerships.

The agreement was executed in Jiaxing City, China, on April 30, 2026, by the Group Chief Executive Officer of NNPC Ltd, Bashir Bayo Ojulari, alongside the Chairman of Sanjiang Chemical Company, Guan Jianzhong, and the Chairman of Xingcheng Industrial Park, Bill Bi.



According to the national oil company, the proposed arrangement would also involve refinery expansion, petrochemical integration, and the development of gas-based industrial hubs around the facilities.

However, the development has generated widespread public engagement and intensified scrutiny over the future of Nigeria’s refineries, with industry experts, energy stakeholders, and concerned citizens raising questions about transparency, accountability, funding structures, and the long-term commercial viability of the proposed partnership.

A senior company official, who spoke with our correspondent in Abuja on Sunday on condition of anonymity due to the sensitivity of the matter, sought to dispel what he described as “false narratives” surrounding the deal, explaining that the understanding signed with the Chinese firms was merely a preliminary framework for exploring possible areas of collaboration.

The official stressed that no financial commitment had been made by NNPC and that no government funds would be deployed for refinery rehabilitation under the arrangement.

According to the official, the agreement only establishes a preliminary framework for discussions on possible areas of collaboration involving financing, operations, maintenance support, petrochemical development, and gas-based industrial projects.

The official said, “It is important to clarify, and one of the first things to clarify is that it is not an agreement or a financial agreement. It is an understanding with the two parties who are interested in exploring opportunities to revamp and expand the capacities of the refinery.

“The Memorandum of Understanding is a preliminary, non-binding agreement that reflects the mutual intention of the parties to explore areas of collaboration and jointly develop a framework for partnership. The scope of discussions includes financing, support for ongoing projects, operations and maintenance, potential expansion into petrochemicals, and other gas-based industrial initiatives.

“What we signed is not an award of contract. It does not commit NNPC Limited to any fresh rehabilitation expenditure. That point must be made very clear because a lot of false narratives have emerged suggesting that the company has already committed huge sums or entered another spending cycle on the refineries. That is completely incorrect.”

The official said he would have shared a copy of the agreement to demonstrate the company’s careful and transparent handling of the understanding, but was constrained by contractual obligations.

The source further disclosed that discussions under the understanding would cover financing structures, support for ongoing projects, operations and maintenance arrangements, petrochemical opportunities, and other gas-based industrial initiatives.

He added that the long-term objective would be to evaluate the possibility of creating an Incorporated Joint Venture arrangement with strategic investors capable of bringing both technical and financial capacity.

“The long-term objective is to evaluate the possibility of establishing an Incorporated Joint Venture arrangement. However, the immediate next step is for both parties to work together to define the detailed commercial, technical, and operational framework that could guide any future partnership,” he said.

The official acknowledged concerns raised by Nigerians regarding accountability and the huge sums previously spent on refinery rehabilitation over the years, with little visible improvement in operations.

However, he maintained that under the current leadership of the company, no fresh refinery rehabilitation programme had been approved since 2025. “The concerns regarding accountability, value assurance, and historical spending associated with the NNPC refineries are acknowledged. Nigerians have genuine concerns because of what has happened in the past.

“But it is important to state clearly that since 2025, NNPC Limited has not committed to, nor undertaken, any new refinery rehabilitation or upgrade programme.

“In the last year under the current leadership, no kobo has been spent on rehabilitation of the refineries, and there is no plan to commit money directly from the company’s purse into another round of spending without commercially viable partnerships,” the official stated.

On concerns that taxpayers’ money could again be deployed to fund refinery projects, the official reiterated that the company’s structure under the Petroleum Industry Act no longer allows reliance on government funding.

“The company is no longer a government agency and cannot get funding from the government. So no amount of government funds will be used for this arrangement. We only signed an understanding. The company has also tried to be transparent by making an announcement on it publicly, which shows our commitment to openness and accountability to Nigerians,” he added.

According to the official, the company’s current strategy is focused on attracting investors and technical partners willing to share risks while helping to return the refineries to sustainable commercial operations.

“Our current approach is guided by commercial prudence, sustainability, and long-term value creation. The strategic focus is to return the refineries to sustainable and profitable operations through partners that are willing to bring capital, technical expertise, operational capacity, and shared commercial risk as equity partners.

“As a commercially driven energy company operating under the Petroleum Industry Act, NNPC Limited is focused on protecting value, minimising direct funding exposure, and ensuring that any future refinery development is based on commercially viable partnership structures rather than continued dependence on government spending,” the official said.

The clarification comes amid renewed public attention on Nigeria’s refineries, including the Port Harcourt, Warri, and Kaduna plants, which have gulped $2.39bn (over N3.2tn) in rehabilitation costs over the years despite prolonged operational challenges.

The PUNCH reports that the Federal Government had spent $2.39bn under the previous administration to rehabilitate the two refineries. Only the Port Harcourt refinery was said to have been completed, with production starting in November 2024. However, it was shut down on May 24, 2025, amid controversy over its output.

In March 2021, the Federal Executive Council approved the sum of $1.5bn for the rehabilitation of the Port Harcourt refinery plant, which operates two refineries: the old plant with a capacity of 60,000 barrels per stream day and a new facility with 150,000 barrels per stream day, bringing the refinery’s combined crude processing capacity to 210,000 barrels per stream day.

FEC also approved the sum of $1.48bn for the rehabilitation of the Warri and Kaduna refineries in August 2021. The then Minister of State for Petroleum Resources, Timpere Sylva, announced this at the end of the weekly FEC meeting in Abuja.

Sylva said the rehabilitation of the Warri and Kaduna refineries would be awarded to Messers Saipem SPA and Saipem Contracting Limited at a combined total cost of $1.484bn and would be executed in three phases of 21, 23, and 33 months.

Sylva said $897,678,800 would be spent on rehabilitating the Warri refinery, while the Kaduna refinery would gulp $586,902,256, noting that the completion of the rehabilitation exercise would be in three phases spread across a 77-month period.

Earlier this year, the Petroleum and Natural Gas Senior Staff Association of Nigeria said the old Port Harcourt refinery had been rehabilitated to about 90 per cent and could resume operations within one week if NNPC Limited decided to restart the plant.

“So, if they want to start it today, within the next week, they can bring it back to life. It has been rehabilitated up to about 90 per cent,” PENGASSAN President, Festus Osifo, said in an interview.

At the Nigerian International Energy Summit, Ojulari described the reopening of the Port Harcourt Refinery and Petrochemical Company in December 2024 as a huge waste of resources for the country, saying it lacked the capacity to run refineries profitably.

“We were pumping cargo into the refinery every month, but utilisation was around 50 to 55 per cent. Those cargoes have value, and we were losing that value. We were spending a lot of money on operations and contractors. But when you look at the net outcome, we were just leaking value, and there was no clarity on how to turn those losses into positive returns,” he added.

At the summit, Ojulari argued that Nigeria’s refining challenges were not just financial but also deeply technical and operational, requiring experienced partners with proven track records.

He said, “What we are doing differently is moving away from just funding projects to bringing in partners who have skin in the game, partners who will operate, optimise, and guarantee performance.”

He further explained that the technical equity model would ensure accountability and efficiency, as partners would only profit when the refineries perform optimally.

He stated, “The days of spending billions on rehabilitation without sustainable output are behind us. We are now focused on partnerships that deliver value, technology transfer, and operational excellence.”

Ojulari also highlighted the importance of integrating refining with petrochemicals and gas-based industries, noting that modern refineries globally are designed as energy hubs rather than standalone fuel-processing plants.

“Refineries must evolve into integrated industrial platforms. That is where the future lies: petrochemicals, fertilizers, and gas monetisation. That is how you create real economic value,” he said.

With this latest China deal, the national oil company appears to be betting on a new partnership model, one that ties investment returns directly to performance, in a bid to finally unlock the long-elusive potential of Nigeria’s refining sector.

Further findings by our correspondent revealed that Sanjiang Chemical is a Chinese private chemical manufacturing company established in 2003 and headquartered in the Zhapu Economic Development Zone, Jiaxing Port Area, Zhejiang Province. It is listed on the Hong Kong Stock Exchange and recognised as one of China’s leading integrated petrochemical producers.

The company specialises in ethylene oxide and ethylene glycol production and operates one of the world’s largest single-unit chemical processing facilities. Its product portfolio includes petrochemicals such as ethylene, propylene, polypropylene, butadiene, hydrogen, methanol derivatives, surfactants, and industrial gases.

Sanjiang runs a large integrated refining and petrochemical complex anchored on a 1,000 KTA EO/EG unit and a 1,250 KTA light hydrocarbon utilisation unit, supported by multiple downstream plants, including polypropylene and surfactant facilities.

It plays a key role in China’s industrial strategy, focusing on high-end petrochemical integration, supply chain security, and export-oriented chemical production, while leveraging advanced logistics connectivity within the Yangtze River Delta industrial corridor.

Xingcheng is an industrial park development and management company based in Guangdong Province, China, operating within the Xincheng Industrial Park in Xinxing County, Yunfu City. The company focuses on industrial infrastructure development, park operations, and investment facilitation, supporting manufacturing clusters across metal processing, electronics, machinery, hardware, and biomedicine.

The industrial park it manages was established as a provincial-level industrial transfer zone in 2006 and upgraded in 2022 into a high-tech industrial development zone designed to attract both domestic and foreign investors.

Xingcheng provides a full industrial ecosystem support, including land development, utilities (gas, power, and wastewater systems), tax incentives, and investment services. It has also developed innovation platforms and supports high-tech enterprise growth, positioning the park as a hub for manufacturing relocation from China’s coastal economic zones into emerging inland industrial corridors.

The firm’s core strength lies in industrial park operations, infrastructure-led investment attraction, and enabling large-scale manufacturing ecosystems within China’s broader regional development strategy.