…Rules out sale of refineriesl$18bn spent on 3 refineries’ TAM, others so far
By Obas Esiedesa, Abuja
ABUJA — After spending $1.5 billion on the rehabilitation of the 210,000 barrels per day Port Harcourt Refinery, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, NNPCL, Bayo Ojulari, has declared that operating it before it was fully completed was ill-informed.
It will be recalled that the Federal Government had, in April 2021, awarded a $1.5 billion contract to the Italian company, Marie Technimont, for the rehabilitation of the refinery.
In December 2023, NNPC management, led by its then Group Chief Executive Officer, Mele Kyari, declared that the refinery had reached 88 per cent completion and was scheduled for full operation after a mechanical completion by the end of the year.
That was not to be until November 2024, when the company announced that it had begun trucking out of petroleum products.
But six months later, in May 2025, it announced a shutdown of the facility for another maintenance.
Ojulari, in a statement by the company, said a review showed that the decision was ill-informed and also ruled out the possibility of selling the refinery to private investors, contrary to recent reports that Dangote Group was about to acquire the company.
Ojulari had, in an interview with Bloomberg at the 2025 OPEC Seminar in Vienna, Austria, earlier this month, said “all options are on the table” when asked about the possibility of selling the refinery.
A statement by NNPC yesterday said Ojulari, who spoke during a company-wide town hall meeting on Tuesday at the NNPC Towers, Abuja, reaffirmed the commitment of the company to completing high-grade rehabilitation and retention of the plant.
He stated that the position wasn’t a shift but informed by ongoing “detailed technical and financial reviews of the Port Harcourt, Kaduna and Warri refineries.
“The ongoing review indicates that the earlier decision to operate the Port Harcourt refinery, before full completion of its rehabilitation, was ill-informed and sub-commercial,” Ojulari said.
The statement added: “Although progress is being made on all three, the emerging outlook calls for more advanced technical partnerships to complete and high-grade the rehabilitation of Port Harcourt refinery. Thus, selling is highly unlikely as it would lead to further value erosion.’’
The statement said Ojularis’s decision to retain the refinery was “received with applause from hundreds of staff attendees who described the position as a renewed sense of business-focused direction across the organisation.’’
It stated further: “The town hall served as more than a performance update; it was an opportunity for candid and constructive engagement. The Executive Vice Presidents presented progress reports from the Upstream, Downstream, Finance, Business Services, Gas, Power, and New Energy businesses, highlighting operational achievements, ongoing reforms, and areas requiring attention.
“In a tone marked by honesty and leadership, challenges and earlier missteps were acknowledged, and a clear roadmap was outlined for the journey ahead.
“The announcement reinforces NNPC’s mandate as a strategic custodian of national energy infrastructure and reflects a firm resolve to deliver on the complete rehabilitation and long-term viability of Nigeria’s refineries.
‘’It also signals continuity in the Federal Government’s broader energy security objectives and a commitment to retaining critical assets under national control.
“Feedback during and after the session revealed a workforce energised and aligned with the leadership’s vision. “Described as reassuring, transformational, and “sustainable, the atmosphere reflected an optimistic outlook among employees and hopefulness about the company’s evolving strategic direction.”
At the backdrop of the planned injection of further cash projected at about $500 billion into the government refineries, Aliko Dangote, the President of the Dangote Group, has expressed doubts about the future functionality of Nigeria’s state-owned refineries in Port Harcourt, Warri, and Kaduna. ““He stated that these refineries, despite significant investments in their rehabilitation, may never operate properly again. ““Dangote also mentioned that his decision to build the Dangote Petroleum Refinery was influenced by the government’s refusal to sell him the existing refineries.“
Recall that the former President Obasanjo had last year expressed similar comments, adding that the NNPC was aware that it could not operate the refineries. He said some investors, including Aliko Dangote, paid $750 million to take over the refineries; however, his successor, Yar’adua, aborted the transaction.
“He said, “I ran to him (Yar’Adua), and I said, ‘You know this is not right.’ He said, ‘Well, NNPC said they can do it.’ I said, ‘NNPC cannot do it.’ I told my successor that ‘the refineries, from what I heard and know, will not work, and when you want to sell them, you will not get anybody to buy them at $200m as scrap.’ And that is the situation we are in.
“So, why do we do this kind of thing to ourselves? NNPC knew that they could not do it, but they knew they could eat and carry on with the corruption that was going on in NNPC. When people were there to do it, they put pressure. In a civilised society, those people should be in jail.
“Earlier this year, former President Obasanjo also said, “I was told not too long ago that since that time, more than $2bn has been squandered on the refineries, and they still will not work.“““If a company like Shell tells me what they told me, I will believe them. If anybody tells you now that it (the refinery) is working, why are they now with Aliko (Dangote)? And Aliko will make his refinery work; he will not only make it work, but he will also make it deliver.”
Huge spending so far without results
In March 2021, the Nigerian government approved expenditure of USD 1.5 billion for the refurbishment and modernisation of the refinery complex in Port Harcourt. The main contract for the modernisation of the refinery was also awarded in the same month.
Over the years, corruption and poor maintenance have undermined the performance of Nigeria’s refineries, while previous Turn Around Maintenance (TAMs) have been unable to redress the woes bedeviling the subsector. Soon after the botched sale of the plants in 2007, the NNPC claimed it had awarded the contract to a Nigerian firm to carry out a comprehensive TAM on all the refineries.
The contract sum as revealed by the then GMD, Abubakar Yar’Adua, was $57 million. But despite the said TAM, the refineries remained comatose, prompting Nigerians to demand clarification on the real status of the plants.
In 2009, the NNPC also announced that it spent $20 million on TAM of the Kaduna refinery alone. The then GMD, Alhaji Sanusi Barkindo, who made the disclosure at a meeting of the Trans-Saharan Gas Pipeline in Abuja, said the TAM became necessary because the Kaduna refinery “is very strategic as the only refinery serving the nineteen states of the North”.
Despite NNPC’s claims that the refineries were undergoing routine TAM, it later dawned on the nation that funds allocated for the TAM were diverted, as was the routine in the corporation. It was revealed that the new Port Harcourt Refinery had undergone TAM only thrice since it was inaugurated in 1989. The last one was carried out in 2000. For the old Port Harcourt Refinery, which was commissioned in 1965, the only major rehabilitation work on it took place in 1989, while the first and only TAM was carried out in 1998.
In the case of Warri Refining and Petrochemical Company, the record showed that the last TAM was executed in 2004. It is not clear how much has been spent so far on the three refineries including the various TAMs, light rehabilitations and Technical Plant Survey, but a rough estimate by the various research analysts put the figure at $18 billion.
The House of Representatives Ad Hoc Committee report in 2023 on the State of Refineries in the Country has said the Federal Government spent a total sum of over N11 trillion on rehabilitating refineries from 2010 to 2023.
According to the report, the total cost of rehabilitation within the period is N11.3 trillion, while the additional costs in other currencies are $593 million, €4.9 billion and £3.5 billion. Givinga further breakdown of the figures, the committee said that while the cost of rehabilitation projects was N42.6billion, the deduction from the Federation Account for rehabilitation was N191.7 billion and the losses by the refineries over a given period at N366.5 billion.
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