The Nigerian National Petroleum Company Limited (NNPC Ltd.) said it shut state-owned refineries after internal reviews showed they were operating at huge losses and destroying value for the country.
Mr. Bashir Ojulari, Group Chief Executive Officer of NNPC Ltd., shared this during a Fireside Chat on Securing Nigeria’s Energy Future at the ongoing Nigeria International Energy Summit (NIES 2026) in Abuja.
Ojulari explained that his team acted quickly to assess the refineries amid public frustration over years of heavy investment and ongoing poor performance.
“When we arrived, the refineries were a major concern. Nigerians were frustrated, expectations were high, and we faced intense pressure,” he said.
“After a detailed review, it became clear that we were simply wasting money,” he added.
Ojulari, who has experience in upstream operations, said he and his team had to learn quickly about downstream challenges.
He noted that crude oil was being supplied to the refineries every month, yet utilization remained around 50–55 percent while operational and contractor costs kept rising.
“When we examined the results, we realized we were losing value without any clear path to profitability,” he said.
He said NNPC decided to halt refinery operations to stop further losses and rethink its strategy, despite political pressure to keep them running.
Ojulari added that the refineries were producing mid-grade products whose value did not match the quality of the crude used.
He praised the Dangote Refinery for supporting Nigeria’s energy supply, calling its timing and strategy crucial.
“Whether you like Dangote or not, we should appreciate the Dangote Refinery. It works, it is in Nigeria, and it gives us space to make better decisions,” he said.
Ojulari said NNPC has strengthened collaboration with the Dangote Refinery to improve value delivery while keeping its role as the supplier of last resort and promoting healthy competition in the downstream market.
He explained that Nigerian refineries have historically failed because they focused too much on financing and engineering, procurement, and construction (EPC), with little attention to long-term operations.
“You cannot have financing, EPC, and O&M contracts all taking value without any responsibility. That system was built to extract, not sustain,” he said.
Ojulari outlined NNPC’s new strategy, saying the company will bring experienced refinery operators in as equity partners instead of relying on contractors.
Under this plan, these partners will acquire stakes in the refineries, manage operations, and help rebuild local technical skills.
“We are not selling Nigeria; we are reducing equity where needed to create sustainable, self-financing refineries that run like businesses,” he said.
He added that discussions are already underway with potential investors, including a major Chinese petrochemical company, with site visits expected soon.
On the crude-for-naira policy and domestic supply, Ojulari said NNPC remains committed to ensuring product availability, adding that pricing will stabilize naturally once supply gaps are addressed.
source: www.vanguardngr.com
African Energy Council