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“NNPC Refineries Are Unsustainable – We Were Just Wasting Money” – Ojulari.
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Bayo Ojulari, has revealed that Nigeria’s state-owned refineries were operating at “monumental losses,” prompting his management team to halt operations to prevent further financial drain on the country.....KINDLY READ THE FULL STORY HERE▶
Ojulari made the disclosure on Wednesday in Abuja during a fireside chat titled “Securing Nigeria’s Energy Future” at the Nigeria International Energy Summit 2026, offering a rare and candid assessment of the operational and commercial realities of the nation’s refining assets.
Acknowledging public frustration, Ojulari said Nigerians had every reason to be upset given the massive funds invested over the years.
“On the refineries, Nigerians were angry. A lot of money has been spent, and expectations were very high. So we were under extreme pressure,” he stated.
Reports indicate that Nigeria’s four state-owned refineries—Port Harcourt (two plants), Warri, and Kaduna—have absorbed billions of dollars in rehabilitation and maintenance costs over decades but have largely failed to sustain output.
Learning On The Job
Ojulari admitted that refining was not his area of expertise, having spent most of his career in the upstream sector.
“My background is upstream, so I was on a vertical learning curve. You are accountable, so you must learn very quickly. Otherwise, there is no escape,” he said.
“We Were Running At A Monumental Loss”
According to Ojulari, a detailed operational review quickly revealed the true financial state of the refineries.
“The first thing that became clear is that we were running at a monumental loss to Nigeria. We were just wasting money. I can say that confidently now,” he declared.
He explained that NNPC was feeding crude oil into the refineries monthly, yet utilisation remained at only 50–55%, causing significant value erosion.
“We were spending a lot on operations and contractors, but at the net level, we were just leaking value,” he said.
More concerning, Ojulari noted, was the absence of any credible plan to reverse the losses.
“Sometimes you make a loss during investment, but you have a line of sight to recovery. That line of sight was not clear here,” he explained.
This lack of clarity made continued operations economically unjustifiable. Halting refinery operations was one of the first major decisions of his administration.
“We decided to stop the refineries and do a quick check. We planned that if things were aligned, we would reopen and work on them,” he said.
Ojulari added that part of the losses came from the quality of products, citing Port Harcourt as an example.
“The crude we were feeding into Port Harcourt was producing mid-grade products. When you aggregate their value against what we put in, it was a waste,” he said.
He also acknowledged the political sensitivity of the decision, given long-standing pressure to keep refineries running to ensure fuel supply.
“There were political pressures to keep the refinery operational. But after 35 years of training to focus on commerciality and profitability, you can’t ignore that,” Ojulari said.
Nigeria’s refineries have long operated below capacity, sometimes at single-digit utilisation or complete shutdowns, forcing the country to rely heavily on imported refined petroleum products.
Between 2015 and 2023, successive administrations approved multiple rehabilitation contracts worth billions of dollars, yet domestic refining output remained negligible, intensifying public scrutiny of NNPC’s efficiency.
Ojulari’s remarks represent one of the most candid admissions by an NNPC chief that continued refinery operations under existing conditions were economically unsustainable. They underscore a broader shift within NNPC, under the Petroleum Industry Act, toward enforcing commercial discipline even in politically sensitive areas such as domestic refining.
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