THE Nigerian National Petroleum Company Limited (NNPCL) under former Group Managing Director, Mr Mele Kyari, spent nearly $3 billion on the rehabilitation of Port Harcourt, Warri and Kaduna refineries. Mr Kyari was bent on ensuring that the refineries worked and competed with the then upcoming Dangote Petroleum Refinery.

Despite this humongous spending, the refineries did not produce petrol till he left office in April 2025. They have also not produced petrol today. Several times the NNPCL announced that the refineries would be shut down for maintenance, yet nothing would come out of such rehabiitation after several weeks of waiting.  

However, the new Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mr Bayo Ojulari, has now spilt the beans, disclosing that the nation’s refineries were operating at massive financial losses, prompting his management team to shut them down to stop further waste.

Mr Ojulari made this known on Wednesday in Abuja during a fireside session entitled, ‘Securing Nigeria’s Energy Future’ at the Nigeria International Energy Summit 2026.

He said public anger over the state of the refineries was justified, noting that huge sums of public funds had been invested over the years with the expectation that the plants would reduce Nigeria’s dependence on imported fuel.

“Nigerians were angry, and rightly so. A lot of money had been sunk into the refineries and expectations were very high. So the pressure on us was extreme,” Mr Ojulari said.

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The NNPCL boss explained that refining was outside his core professional background, as most of his career had been spent in the upstream segment of the oil industry. However, he said the responsibilities of leadership demanded that he quickly understood the sector and took hard decisions.

“My background is upstream, so I had to learn fast. You are accountable, and if you don’t learn quickly, there is no escape,” he said.

Mr Ojulari stated that an internal assessment of refinery operations revealed that the facilities were destroying value rather than creating it.

“What became clear very quickly is that we were running at a monumental loss to Nigeria. We were simply wasting money,” he said.

Although crude oil was being supplied to the plants, he disclosed that refinery utilisation averaged only between 50 percent and 55 percent, while operating expenses, contractor fees and other costs kept rising.

“We were spending heavily on operations and contractors, but when you looked at the final numbers, we were just leaking value,” he added.

According to him, unlike normal investments where early losses can be justified by future gains, there was no visible pathway for recovery in the case of the refineries.

“Sometimes you lose money at the start of an investment, but you can see where recovery will come from. In this case, there was no such line of sight,” he said.

He said one of the first major decisions of his administration was to halt operations and carry out a rapid reassessment of the assets.

“We decided to stop the refineries and do a quick review. If the conditions were right, we planned to reopen and work on them,”Mr Ojulari noted.

He further explained that the type and quality of products being refined also worsened the losses. At the Port Harcourt Refinery, for example, the crude processed produced mostly mid-grade products whose market value was far lower than the cost of the crude input.

“When you add up the value of what came out compared to what went in, it was a waste,” he said.

Mr Ojulari admitted that the decision to suspend operations attracted strong political pressure, as NNPC had historically been expected to keep the refineries running to guarantee fuel supply.

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“There was a lot of pressure to keep producing. But after over 35 years of being trained to focus on commercial viability and profitability, you cannot ignore that reality,” he said.

Nigeria owns four refineries – two in Port Harcourt, one in Warri and one in Kaduna – all of which have struggled for decades with poor performance despite repeated turnaround maintenance exercises that have cost billions of dollars.

At various times, the facilities have operated at single-digit capacity or been completely shut down, forcing Africa’s largest oil producer to rely heavily on imported petroleum products.

Mr Kyari is currently being probed and is facing prosecution by the Economic and Financial Crimes Commission (EFCC).