Bayo Ojulari
The Nigerian National Petroleum Company Limited (NNPC Ltd.), says the state-owned refineries were shut down after internal reviews revealed that they were operating at “monumental losses” and destroying value for the country.
Speaking during an interactive session, Ojulari said that his leadership team moved swiftly to understand the state of the refineries amid public outrage over years of heavy investment and persistent underperformance.
“When we came in, refineries were a hot topic. Nigerians were angry, expectations were very high, and we were under extreme pressure.
“After a detailed review, it became clear that we were simply wasting money,” he said.
Ojulari, whose professional background is in upstream operations, said that he and his team were forced onto a “vertical learning curve” to understand downstream challenges.
According to him, crude oil was being supplied to refineries monthly, yet utilisation hovered around 50–55 per cent, while operational and contractor costs continued to soar.
“When we looked at the net outcome, we were leaking value with no clear line of sight to profitability,” he said.
He said that NNPC made the decision to halt refinery operations to stop the rot and reassess strategy, in spite of political pressure to keep them running.
He said that further analysis showed that the refineries were producing mid-grade products whose value did not justify the quality of crude input.
“That trajectory would have meant value destruction for the next 30 years. We were not going to do that,” he said.
Ojulari credited the Dangote Refinery with providing critical breathing space for Nigeria’s energy supply, describing its emergence as timely and strategic.
“Whether you love Dangote or hate him, thank God for the Dangote Refinery. It is working, it is in Nigeria, and it gives us room to make better decisions.”
He said that NNPC had since strengthened collaboration with the Dangote Refinery to maximise value delivery while maintaining its statutory role as supplier of last resort and ensuring healthy competition in the downstream market.
Explaining why Nigeria’s refineries have historically failed, Ojulari identified a structural flaw: excessive focus on financing and engineering, procurement and construction (EPC), with little attention to long-term operational capacity.
“You can not have financing, EPC, and O&M contracts all extracting value without any skin in the game. That system was designed for taking, not sustaining,” he said.
Speaking on the NNPC’s new strategies , the group chief executive said that the company would bring in experienced refinery operators as equity partners, rather than contractors.
He said that under the plan, such partners would acquire stakes in the refineries, lead operations, and help rebuild local technical capacity.
“We are not selling Nigeria, we are selling down equity where necessary to secure a sustainable, self-financing refinery that runs like a business, ” Ojulari said.
He said that discussions were already underway with potential investors, including a major Chinese petrochemical company, with site inspections expected shortly.
On crude-for-naira policy and domestic supply, Ojulari said that NNPC remained committed to ensuring product availability as a priority, noting that pricing would stabilise naturally once supply gaps are closed.(NAN)
