Bayo Ojulari, the Group Chief Executive Officer of NNPC Limited, stated that the organization lacks the capability to efficiently manage a refinery, referring to the reoperation of the Port Harcourt Refinery and Petrochemical Company as a serious misallocation of resources.
Ojulari made these comments on Wednesday, February 4, during his address at the ongoing 2026 Nigerian International Energy Summit.
He emphasized that successful refinery operations necessitate sufficient financial backing, skilled Engineering, Procurement and Construction (EPC) contractors, and robust operational and maintenance capabilities—criteria which he indicated the NNPC currently fails to fulfill.
The Port Harcourt Refinery had been refurbished at a cost of approximately $1.5 billion under the leadership of former NNPC Group Chief Executive Officer Mele Kyari, with its reopening taking place in November 2024 after nearly three years of extensive renovation. However, the facility was halted again in May 2025 due to ongoing financial deficits.
Ojulari remarked that a comprehensive evaluation of the refinery's operations revealed it was incurring substantial losses.
"The first realization was that we were operating at a staggering loss for Nigeria. We were simply squandering funds. I can now assert this with confidence," he stated. "Thus, my initial decision was to halt operations in order to stop the financial drain and subsequently reassess possible solutions." He questioned the refinery's losses despite consistent crude supply.
"We were sending cargo to the refinery monthly, yet utilization ranged between 50 to 55 percent. Those cargoes hold value, which we were losing. We incurred significant operational and contractor costs. However, when reviewing the net results, it became evident we were merely leaking value, without a clear strategy to convert these losses into potential gains," he added.
Ojulari mentioned that NNPC is actively pursuing dependable partners with established expertise in refinery management for the operations of Nigeria's refineries.
"To operate a refinery successfully, you require three essential elements," he noted. "First, financial resources to facilitate operations. Second, a proficient EPC contractor. Lastly, an outstanding operational capacity to manage the refinery."
He highlighted that NNPC's strategy, as ratified by its board, is to form partnerships with experienced refinery operators rather than engaging contractors.
"We are not seeking contractors. We are not looking for Operations & Maintenance (O&M;) service suppliers. We are searching for an organization that has actual experience in refinery management," he explained. He also pointed out that the effective functioning of the Dangote Refinery has lessened the pressure to swiftly make decisions regarding the revival of government-owned refineries.
"There was significant pressure concerning continuity, yet we were not under that burden. And we owe thanks to Dangote Refinery. Thank goodness. Regardless of one’s feelings towards him, we are grateful."
"It is a relief that he is a Nigerian and not from another continent. Regardless of the circumstances, it provided us with the necessary breathing room as we now have a refinery that operates optimally," he added.
Regarding oil production, Ojulari expressed hope that Nigeria could achieve a production rate of 1.8 million barrels per day by 2026. However, he regarded the Federal Government’s budget benchmark of 2.06 million barrels per day for 2025 as excessively ambitious, particularly as last year's average production was approximately 1.7 million barrels per day.
"This year, our goal is to reach two million barrels per day, yet the budget is based on around 1.8 million barrels per day. Therefore, we are avoiding overcommitment," he remarked.
"One financial crisis Nigeria faced last year stemmed from overestimating production rates. We set our production and revenue expectations too high, and midway through the year, we faced declining oil prices alongside production falling short of predictions. However, spending had already been planned based on those forecasts, leading to significant repercussions," he noted.
Ojulari concluded that it is crucial to approach production planning in a credible and realistic manner to avert future financial difficulties.
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