The Nigerian National Petroleum Company Limited (NNPCL) has admitted that reviving the country’s ailing refineries has been more complex than initially projected, citing decades of neglect and structural decay. Group Chief Executive Officer, Bayo Ojulari, revealed that attempts to restore the plants in Port Harcourt, Warri, and Kaduna have been hindered by outdated infrastructure and poor maintenance culture.
Comparing the refineries to an “old car abandoned without oiling or greasing,” Ojulari said every fix often reveals deeper underlying problems, making sustainability elusive.
Port Harcourt Refinery Losing Millions Monthly
Ojulari disclosed that when he took over, the Port Harcourt refinery alone was losing between ₦300m and ₦500m monthly. The inefficiency was glaring: the plant processed nearly 950,000 barrels, but converted less than 40% into usable products, much of which ended up as mid-grade fuel that failed to meet local specifications.
“The refinery operates as an integrated system. The old and new sections must run together to deliver high-grade PMS, but years of neglect have broken that synergy,” Ojulari said.
New Path: Joint Ventures and Private Partnerships
To end the cycle of losses, NNPCL is adopting an Incorporated Joint Venture (IJV) model, bringing in professional refining companies as partners. Commercial and technical reviews for the Port Harcourt plant have already been completed, with plans underway to secure experienced operators who can inject both expertise and capital.
Ojulari emphasised that the Tinubu administration has not pressured NNPCL into quick fixes or politically driven projects, allowing management to pursue long-term solutions that ensure sustainability.
Leveraging Dangote and Securing Supply
In the short term, NNPCL is leaning on its equity in the 650,000 b/d Dangote Refinery to stabilise domestic supply and reduce dependence on imports. This strategy aims to ensure there are no product shortages while refinery rehabilitation proceeds.
The GCEO also assured Nigerians that reforms will be tough but necessary, noting: “Transformation comes with a price. We will not bow to short-term pressures. The goal is sustainable operations, not political optics.”
Labour Union Endorses Reforms
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), led by Festus Osifo, expressed support for the reforms. Osifo suggested that partial privatisation of the refineries could further reduce political interference, ensuring they operate as viable, profit-driven entities.
He commended Ojulari’s leadership, particularly improvements in pipeline security and reduced crude theft, which have boosted production levels. “Since you came on board, pipelines from Forcados to TNP have resumed operations. That stability is already reflecting in higher national output,” he said.
The Bigger Picture
Nigeria’s refinery challenges highlight the cost of long-term neglect and the need for structural reforms in the downstream sector. While the Dangote Refinery has shifted Africa’s energy map, NNPCL’s rehabilitation plans could restore national refining pride if executed with discipline.
For now, patience remains critical. As Ojulari stressed, the task is not just to restart refineries but to make them sustainable engines of energy security and economic growth.