By Chidi Ugwu
The Nigerian National Petroleum Company Limited (NNPC Ltd) is overhauling its refinery rehabilitation strategy, blaming decades of operational weaknesses — rather than funding or construction gaps — for the persistent failure of Nigeria’s state-owned refineries.
Engineer Bashir Bayo Ojulari, the Group Chief Executive Officer, who gave the hint at the ongoing NIES 2026 in Abuja on Wednesday, identified a structural flaw at the heart of past refinery investments: too much focus on financing and engineering contracts, and too little attention to the long-term operational expertise required to run the facilities profitably.
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According to Ojulari, after an internal review of the country’s refineries, NNPC concluded that previous turnaround efforts concentrated heavily on raising capital and awarding engineering, procurement and construction (EPC) contracts, while neglecting the critical phase that determines success — day-to-day operations over the lifespan of the plants.
“Financiers take their margins, EPC contractors complete their jobs and leave. But you are left to operate the refinery for 30 or 40 years. That operational capacity was never properly developed,” a senior company official said.
This imbalance, the GCEO noted created a system where financiers, contractors and operations-and-maintenance firms extracted value upfront, leaving NNPC to manage complex assets without the technical depth and commercial discipline required to sustain profitability.
The result, he said, has been years of underperformance, low utilization rates and mounting losses despite repeated government spending on rehabilitation.
Ojulari disclosed that some of the refineries were processing crude at barely half their installed capacity while operating costs remained high, leading to what it described as “value destruction” rather than returns for the country.
Determined to break from the past, the NNPCL boss said it is abandoning the contractor-led model and instead pursuing partnerships with established global refinery operators that will invest directly in the assets.
Under the new approach, these partners will acquire equity stakes in the refineries, ensuring they have what the he described as “skin in the game” and a direct financial incentive to deliver efficiency, reliability and profitability.
“We are not looking for contractors anymore,” he said.
“We want companies that run refineries successfully. They will co-own the assets, lead operations and help us build the competence to manage them sustainably.”
By bringing in operators with proven track records, NNPC management hopes to embed operational excellence from project design through commissioning and long-term management — a model commonly used by international oil companies for large-scale energy infrastructure.
The strategy also aims to ensure that refineries can eventually finance their own operations, reducing dependence on government support and positioning them to compete effectively in both domestic and regional markets.
Ojulari said discussions with potential investors are already underway, including foreign petrochemical and refining firms, adding that NNPC is prepared to divest significant equity if necessary to secure a viable and sustainable arrangement.
Industry analysts say the shift signals a move away from politically driven spending toward a more commercial, performance-based framework for Nigeria’s downstream sector.
The GCEO also stated that the company is also strengthening collaboration with the Dangote Refinery to stabilize domestic fuel supply while state-owned plants are restructured.
“Building refineries is no longer the challenge — running them efficiently is.
“Our solution is to put in place a system that allows the refineries to operate like real businesses,”
“That is the only way they can survive for the next 30 or 40 years.” he said.
