Nigeria Moves to Hand Chinese Firms Majority Control of Key Refineries in $2.5bn Rescue Deal

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The Nigerian National Petroleum Company Limited (NNPCL) is reportedly negotiating a major energy partnership that could hand Chinese investors a controlling 51 percent stake in two of Nigeria’s most strategic refineries — the Port Harcourt and Warri refineries — in what analysts describe as one of the country’s most significant oil-sector restructuring moves in years.

The development follows the signing of a Memorandum of Understanding (MoU) between NNPCL and Chinese firms during a visit to Jiaxing, China, on April 30, 2026. According to details circulating within industry circles and professional networks, the agreement was signed by NNPCL Group Chief Executive Officer, Bashir Bayo Ojulari, alongside representatives of Sanjiang Chemical Company Limited and Xingcheng/Fuzhou Industrial Park Operation and Management Co. Ltd..

Under the proposed Technical Equity Partnership framework, the Chinese companies would finance, complete, operate, and maintain the long-troubled refineries, while NNPCL would reportedly transition into a minority stakeholder with limited operational and financial responsibilities.

The proposed deal comes after Nigeria spent more than $2.5 billion on rehabilitation projects for the refineries over the past several years, with little to show in terms of sustained refining output.

Industry reports indicate that approximately $1.5 billion was allocated to the rehabilitation of the Port Harcourt Refinery, while about $897.6 million was committed to the Warri Refinery in 2021 alone. Despite these massive expenditures, the facilities have continued to struggle with operational inefficiencies and repeated shutdowns.

Nigeria, Africa’s largest crude oil producer, has long battled the paradox of exporting crude oil while importing large volumes of refined petroleum products due to the poor state of its domestic refineries. The continued dependence on fuel imports has placed enormous pressure on foreign exchange reserves and contributed to persistent fuel price volatility across the country.

Supporters of the proposed Chinese partnership argue that foreign technical expertise and private-sector management may finally provide the operational efficiency successive government-led rehabilitation efforts failed to achieve. They believe the deal could revive local refining capacity, improve fuel availability, reduce import dependence, and potentially stabilize petroleum prices over time.

The agreement is also expected to include plans for petrochemical expansion projects and industrial gas hubs tied to the refinery operations, although final equity and operational details are still being negotiated.

However, the proposed arrangement has triggered concerns among critics who fear Nigeria may be surrendering strategic national assets to foreign control. Some observers argue that granting majority ownership of critical energy infrastructure to foreign investors raises serious questions about economic sovereignty, long-term national interest, and control over domestic fuel supply chains.

Others warn that while foreign investment may solve short-term operational problems, it could deepen Nigeria’s dependence on external powers in the energy sector if adequate safeguards are not put in place.

The refineries involved remain among Nigeria’s most important energy assets. The Port Harcourt refinery is the country’s largest state-owned refining complex, while the Warri refinery has historically served as a major supply hub for petroleum products across parts of southern Nigeria.

For many Nigerians, the key concern remains whether the proposed partnership will lead to lower fuel prices, improved fuel supply, and sustainable refinery operations after decades of failed turnaround maintenance projects and billions of dollars in public spending.

The negotiations are still ongoing, and further technical agreements are expected in the coming weeks as both sides work toward finalizing the structure of the partnership.