NNPC refineries operated at huge financial loss – Ojulari

The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd), Bayo Ojulari, has revealed that Nigeria’s state-owned refineries were operating at what he described as a “monumental loss,” forcing the company’s leadership to suspend operations to prevent further financial damage.

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.

Speaking candidly about the challenges facing the country’s refining sector, the NNPC boss said continued operations under the existing conditions were eroding value rather than generating returns for the nation.

According to him, public anger over the refineries was justified, given the scale of public funds invested over the years and the high expectations placed on the facilities.

“On the refineries, Nigerians were angry. A lot of money has been spent, and expectations were very high. So we were under extreme pressure, extreme pressure,” Ojulari said.

He admitted that upon assuming office, refining was not his core area of expertise, having spent most of his career in the upstream sector, but said accountability demanded rapid learning.

“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.

Ojulari explained that once his management team began a detailed review of refinery operations, the financial reality became immediately clear.

“The first thing that became clear, and I want to say this very clearly, is that we were running at a monumental loss to Nigeria. We were just wasting money. I can say that confidently now,” he said.

He revealed that NNPC was consistently pumping crude cargoes into the refineries each month, yet utilisation levels hovered around 50-55 per cent, resulting in significant value leakage.

“We were spending a lot of money on operations, a lot of money on contractors. But when you look at the net, we were just leaking away value,” Ojulari said.

More troubling, he noted, was the absence of any credible plan to turn the losses around.

“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 added.

As a result, Ojulari said the first major decision of his administration was to halt refinery operations to prevent further losses and allow for a rapid reassessment.

“We decided to stop the refinery and do a quick check. We planned that if things were lined up, we would reopen and work on them,” he said.

He disclosed that part of the value destruction stemmed from the quality of products being produced, citing the Port Harcourt Refinery as an example.

“The crude we were taking into Port Harcourt was producing mid-grade products. When you aggregate their value compared to what you put in, it was a waste,” he said.

Ojulari acknowledged that the decision to halt operations was politically sensitive, noting that NNPC had historically been pressured to keep refineries running to ensure fuel supply continuity.

“There were political pressures to keep the refinery product, lots of pressure. But when you have been trained for over 35 years to focus on commerciality and profitability, you can’t sleep with that,” he said.

Nigeria’s four state-owned refineries, Port Harcourt (two plants), Warri, and Kaduna, have for decades operated far below capacity despite repeated turnaround maintenance exercises costing billions of dollars.

At various points, the plants have operated at single-digit capacity or been shut down entirely, forcing Africa’s largest oil producer to rely almost entirely on fuel imports.

Between 2015 and 2023 alone, successive administrations approved multiple rehabilitation contracts, yet domestic refining output remained negligible, intensifying public scrutiny of NNPC’s operational efficiency.

Ojulari’s comments mark one of the most candid acknowledgements by an NNPC chief executive that continued refinery operations, under prevailing conditions, were economically unjustifiable.

The remarks underscore a broader shift within NNPC, under the Petroleum Industry Act, toward commercial discipline, even in politically sensitive areas such as domestic refining.