NNPC Admits Inability to Operate Refineries at Profit
The Group Chief Executive Officer of NNPC Limited, Bayo Ojulari, has made a startling admission about the corporation's operational limitations. Speaking at the ongoing 2026 Nigerian International Energy Summit on Wednesday, February 4, Ojulari declared that NNPC currently lacks the necessary capacity to run refineries profitably.
Port Harcourt Refinery Rehabilitation Deemed Wasteful
Ojulari specifically described the recent reoperationalisation of the Port Harcourt Refinery and Petrochemical Company as a major waste of resources. The facility, which underwent rehabilitation costing approximately $1.5 billion under former NNPC Group CEO Mele Kyari, reopened in November 2024 after nearly three years of work.
"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," Ojulari stated during his summit presentation.
Operational Deficiencies and Financial Losses
The NNPC GCEO outlined three critical requirements for effective refinery operations that the corporation currently fails to meet:
- Adequate financing to support operations
- Competent Engineering, Procurement and Construction contractors
- Strong operational and maintenance capacity
Despite receiving regular crude supply, the Port Harcourt Refinery operated at only 50-55% utilization before its shutdown in May 2025 due to sustained financial losses. "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," Ojulari explained.
New Partnership Strategy for Refinery Management
Ojulari revealed that NNPC's board-approved strategy now focuses on partnering 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 emphasized.
The successful operation of the Dangote Refinery has provided crucial breathing space for NNPC's decision-making process. "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," Ojulari remarked.
Realistic Oil Production Projections
On Nigeria's oil production outlook, Ojulari expressed optimism about reaching 1.8 million barrels per day in 2026 but described the Federal Government's 2025 budget benchmark of 2.06 million barrels per day as overambitious. He noted that average production in the previous year was approximately 1.7 million barrels per day.
"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," Ojulari cautioned, emphasizing the need for credible and realistic production planning to prevent future fiscal challenges.
