The Group Chief Executive Officer of NNPC Limited, Engr. Bayo Ojulari, has admitted that Nigeria squandered massive public resources on the Port Harcourt Refinery, declaring that the $1.5 billion rehabilitation project delivered losses rather than value and exposed the national oil company’s inability to run refineries efficiently.
Speaking on Wednesday at the 2026 Nigerian International Energy Summit (NIES), Ojulari said a post-review of the refinery forced a painful but unavoidable decision to shut it down and stop further financial hemorrhage.
According to him, the refinery’s operations represented a steady erosion of national value, despite regular crude supply and significant operational spending with no clear path to profitability despite years of heavy spending.
The GCEO lamented that crude supplied to local refineries produced low-value outputs while operating and contractor costs continued to drain public resources.
He said: “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. We were pumping valuable crude in and getting products that could not justify the cost.
“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.”
The Port Harcourt Refinery, refurbished at about $1.5 billion under former NNPC GCEO Mele Kyari, was reopened in November 2024 after nearly three years of rehabilitation but shut again in May 2025 when it became clear the facility could not sustain itself financially.
Ojulari revealed that even at over 50 per cent utilisation, the refinery remained a drain on national resources.
“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.”
The GCEO blamed the failure on structural weaknesses within NNPC, including gaps in financing, engineering competence, and refinery operations.
The Group Chief Executive Officer said for Nigerian Refineries to work, three things are needed which are finance, competent EPC contractors and most importantly, world class capacity for the refineries.
“To make a refinery work, you need three things; First, financing to support operations. Second, a competent EPC contractor. Third, world-class operational capacity to run the refinery.
The GCEO said:”I will simplify the refinery story for you all so that you can tell the story yourself. To make the refinery work, you need three things. I have simplified to three things. First, you need the financing because you need to finance the work, finance the activities and all of that.
“Two, you need a competent EPC contractor to deliver world-class project. Three, you need a world-class operational capacity to run the refineries. So it’s not complete, That was the Nigerian refinery never worked.
“The reason our refineries have not worked is that we are focused on the first two, EPC and financing. They are financing you for margins and profitability. The EPC contractors, they do their work and get paid. So they move on.
Ojulari who disclosed that NNPC has now abandoned the contractor-driven model, said it was seeking partners with a proven record in running refineries.
“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 also acknowledged that the emergence of the Dangote Refinery has fundamentally altered Nigeria’s refining outlook, reducing the pressure on government-owned plants to deliver immediately.
“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 added.
On crude oil production, the GCEO struck a note of realism, distancing NNPC from what he described as past overambitious projections that hurt national finances.
While expressing confidence that Nigeria could reach 1.8 million barrels per day in 2026, he criticised the 2025 budget benchmark of 2.06 million barrels per day as unrealistic, noting that average output last year was around 1.7 million barrels per day.
“For this year, we have a target of 2 million barrels per day, but the budget is based on about 1.8 million barrels per day. So we are not overcommitting,” he said.
Ojulari warned that inflated production forecasts had already cost Nigeria dearly saying, “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 stressed that unless Nigeria embraces credible production planning and economic realism, the cycle of waste, loss, and fiscal stress would continue.
