Nigeria will sell its majority shareholding and forfeit its controlling stake in all its four comatose oil refineries if the ongoing negotiation talks succeed, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari said on Wednesday.
The NNPC head told Channels TV that talks were progressing on an operating model, which would make the corporation or the Nigerian government become a minority shareholder in the assets.
This is coming days government declared it would no longer fix the pump price of petrol and said it had completely removed fuel subsidy, which is said to cost Nigeria well over a trillion every year, more than the country’s annual budget for education and health.
“It means there will be more scrutiny of shareholders and also becoming more efficient to operate. That conversation is on the table,” Kyari said, not mentioning how the Nigerian government planned to transfer ownership.
The loss-making refineries have worked only intermittently for years due to acute underinvestment and highly dilapidated machinery, making Africa’s biggest exporter the only member nation of the Organisation of the Petroleum Exporting Countries (OPEC) that imports petroleum products.
In the past 13 years, government has made at least five attempts to crank up the refineries with the combined capacity to refine 445,000 barrels of crude per day to no avail.
The NNPC last month asked private investors to bid to fix pipelines and depots serving the refineries, which had been target of theft and vandalism for years.
The state-owned firm announced in April it had shut the refineries down to obtain funding for their rehabilitation and would no longer manage them when they recommenced operation.
In the 13 months to 30th June, the refineries processed almost no crude even though they incurred consolidated losses of N142.1 billion ($367 million).