Nigeria's refining capacity is currently insufficient to meet domestic demand, forcing the country to import Petroleum products. Nigeria's state-held refineries (Port Harcourt I and II, Warri, and Kaduna) have a combined nameplate capacity of 438,750 bbl/d, but problems including sabotage, fire, poor management and a lack of regular maintenance contribute to the current operating capacity of around 214,000 bbl/d.
The Nigerian government is granting permits to build several independently-owned refineries in Nigeria. Sapele Petroleum Limited is waiting for final approval to construct a $105-million, 120,000 bbl/d Oil refinery in Delta State. The refinery is one of the more probable to be built and could save Nigeria as much as $2 billion in costs for refined petroleum imports.

Nigeria is trying to privatize state entities by selling NNPC's four oil refineries, Petrochemicals plants, and its Pipelines and Products Marketing Company (PPMC). However, multinational oil companies have shown little interest in investing in refinery privatization.
The Nigerian government recently opened negotiations with Libyan, Indian, and Chinese investors. In July 2004, the Group Managing Director of NNPC announced that a two-year program was underway with Accenture and Shell Global Solutions to reengineer PPMC to make it competitive in global markets.
Considerable opposition to the proposed measures have been voiced by the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), which fear that job losses and higher product prices will result from the privatizations. In February 2005, Majestic Oil (Sierra Leone) bought the Nigerian government's 48.4 percent stake in the West Africa Oil Refinery in Freetown. Majestic also acquired Unipetrol Nig LPC's 24.2 percent share, when the company failed to invest in the rehabilitation of the facility.

Source: Energy Information Administration