Thursday, February 5, 2026 - The Group Chief Executive Officer of NNPC Limited, Bayo Ojulari, has said the corporation lacks the capacity to run a refinery, describing the operationalization of the Port Harcourt Refinery and Petrochemical Company as a major waste of resources.
Ojulari made the remarks on Wednesday, February 4, while
speaking at the ongoing 2026 Nigerian International Energy Summit
He said effective refinery operations require adequate
financing, competent Engineering, Procurement and Construction contractors, as
well as strong operational and maintenance capacity, conditions he said NNPC
does not currently meet.
The Port Harcourt Refinery, rehabilitated at a cost of about
$1.5 billion under the leadership of former NNPC Group Chief Executive Officer
Mele Kyari, was reopened in November 2024 after nearly three years of
rehabilitation. However, the facility was shut down again in May 2025 following
sustained financial losses.
Ojulari said a detailed review of the refinery’s operations
showed that it was operating at a significant loss.
“The first thing that became clear was that we were running
at a monumental loss to Nigeria. We were just wasting money. I can say that
confidently now,” he said. “So the first decision I had to make was to stop the
rot by shutting it down and then quickly recalibrating to see what could be
done.” He questioned how the refinery continued to post losses despite
receiving regular crude supply.
“We were pumping cargo into the refinery every month, but utilization
was around 50 to 55 per cent. Those cargoes have value, and we were losing that
value. We were spending a lot of money on operations and contractors. But when
you look at the net outcome, we were just leaking value, and there was no
clarity on how to turn those losses into positive returns,” he added.
Ojulari said NNPC is now seeking reliable partners with
proven experience in refinery management to operate Nigeria’s refineries.
“To make a refinery work, you need three things,” he said.
“First, financing to support operations. Second, a competent EPC contractor.
Third, world-class operational capacity to run the refinery.”
According to him, NNPC’s current strategy, as approved by
its board, is to partner with experienced refinery operators rather than
contractors.
“We are not looking for contractors. We are not looking for
O&M service providers. We are looking for an entity that actually runs
refineries,” he said. He added that the successful operation of the Dangote
Refinery had reduced the urgency to rush decisions on reviving government-owned
refineries.
“There was a lot of pressure about continuity, but we were
not under that pressure. And thank God for Dangote Refinery. Thank God. Whether
you love Dangote or hate him, thank God.
“Thank God he is a Nigerian and not someone from another
continent. Despite everything, that gave us breathing space because we now have
a refinery that is working,” he said.
On oil production, Ojulari expressed optimism that Nigeria
could reach 1.8 million barrels per day in 2026. However, he described the
Federal Government’s 2025 budget benchmark of 2.06 million barrels per day as
overambitious, noting that average production in the previous year was about
1.7 million barrels per day.
“For this year, we have a target of two million barrels per
day, but the budget is based on about 1.8 million barrels per day. So we are
not overcommitting,” he said.
“One of the financial problems Nigeria faced last year was
overprojection. We overprojected production and revenue, and by mid-year, oil
prices were lower while production was below projections. Yet spending plans
had already been made based on those assumptions. That has far-reaching
consequences,” he said.
Ojulari said credible and realistic production planning must
be taken seriously to prevent future fiscal challenges.
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