The Group Chief Executive Officer of NNPC Limited, Engr. Bayo Ojulari, has stated that the reopening of the Port Harcourt Refinery and Petrochemical Company as a huge waste of resources, for the country as it lacks the capacity to run refineries profitably.

Speaking during the ongoing 2026 Nigerian International Energy Summit on Wednesday, Ojulari said effective refinery operations require adequate financing, competent Engineering, Procurement and Construction (EPC) contractors, as well as strong operational and maintenance capacity—conditions he said NNPC presently does not meet.

It would be recalled that the refinery was rehabilitated at the cost of about $1.5 billion under the leadership of former NNPC GCEO, Mele Kyari, and was reopened in November 2024 after nearly three years of rehabilitation.

It was eventually shut down in May 2025 following sustained financial losses.

Daily Trust had reported last year that shutting down of the Port Harcourt Refinery, the biggest refinery in the country has caused the Nigerian government over $249.7 million equivalent of N366.210 billion, in the period of five months, from May 24, 2025 to October 31, which is the period of 156 days.

The refinery, located at Eleme axis of Rivers State, was revived in November, 2024 and commenced operations thereafter.

The NNPCL had stated that the revived plant has the production capacity of 60,000 barrels-per-day and was producing at least 1.4 million liters of Premium Motor Spirit (PMS) every day.

Also, the NNPC stated then that the refinery was producing straight-run gasoline (Naphtha) blended into 1.4 million litres of PMS daily; 900,000 litres of kerosene; 1.5 million litres of Automotive Gas Oil (Diesel); 2.1 million litres of Low Pour Fuel Oil (LPFO), and additional volumes of Liquefied Petroleum Gas (LPG), also known as cooking gas.

However, Ojulari who was appointed by President Bola Tinubu in April, 2025 explained that a detailed review of the refinery’s operations revealed that it was running 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. 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 said.

He questioned how the facility continued to record losses despite regular crude supply.

“We were pumping cargo into the refinery every month, but utilisation 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 the country’s refineries.

“To make a refinery work, you need three things,” he said, adding, “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.

…Oil production to reach 1.8m barrels

On oil production, Ojulari expressed optimism that Nigeria could achieve a production level of 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 last 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 explained.

“One of the financial problems Nigeria faced last year was over-projection. We over-projected 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 stressed that credible and realistic production planning must be taken seriously to avoid future fiscal crises.

… N6trn saved from importation of PMS in 9 months – NMDPRA

Meanwhile, the Authority Chief Executive of the Nigerian Midstream and Downstream Regulatory Authority, Saidu A. Mohammed, said the reduction in importation of petroleum products into the country has saved Nigeria N6trn.

He added that the reforms in the mid and downstream sector have led to the rejuvenation of the subsector and the rise is led by the Dangote Petroleum Refinery.

He said the refinery is contributing 100 percent of Nigeria’s domestic consumption.

“The bold economic reforms of President Bola Ahmed Tinubu, have created the renaissance that the downstream sector is enjoying and would continue to leverage upon for sustained sectoral growth in the future.

“The cumulative impact of the full deregulation of the downstream sector; the harmonization of the forex market; the incentivization and deepening the use of gas and the trading of crude and product in Naira has reduced the fiscal economic losses of importing Petroleum Product by over N6 trillion in the 1st nine months in 2025. We congratulate and celebrate Mr. President and our Ministers for these enduring leadership legacies in the downstream energy sector,” he stated.

He expressed excitement in the strategic growth the gas sector is experiencing as a major energy provider in Nigeria and the region at large.

…What pause on refinery means – Expert

Speaking with Daily Trust, An Emeritus Professor of Petroleum Economics, Prof. Omowumi Iledare, said the pause in refinery rehabilitation is being framed strictly as a value test, whether the current structure creates or destroys economic value.

He said from an analytical standpoint, that’s a legitimate lens.

“Continuing rehabilitation without fixing the underlying commercial model would likely compound inefficiencies. His emphasis on JV partnerships, equity restructuring, and operational reconfiguration suggests a search for structural solutions rather than cosmetic fixes.”

He added that for now, the focus appears to be restoring commercial viability before reopening the ownership debate.

“That sequencing is consistent with how distressed industrial assets are typically handled,” he stated.

He noted that what stands out most is the candor as public energy conversations rarely admit value destruction.

“By stating it plainly, the GCEO signaled a shift from managing perception to confronting economic reality. The refinery pause should therefore be read not as retreat, but as a diagnostic reset.”

He, however, said the risk now is inertia and structural reform must not become another indefinite holding pattern.

“Partnerships must be credible, governance transparent, and performance measurable. If execution matches intent, this moment could mark a turning point in how Nigeria manages strategic energy infrastructure — replacing sentimental asset management with disciplined value creation. That shift would matter far more than the fate of any single refinery.”

Mike Osatuyi, a former General Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN) insisted that the refinery never worked despite the $1.5bn spent on rehabilitating it.

He said the authorities should explain to Nigeria what went wrong with the refinery, adding that “despite all the noise about the refinery, it never worked.” (Daily Trust)

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