Port Harcourt refinery nearly ready, but profit concerns delay restart – PENGASSAN

THE Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) says the old Port Harcourt refinery is close to full readiness and can return to production within a week, but is being held back by economic considerations rather than technical problems.

Speaking on a Channels Television programme on Tuesday, PENGASSAN President, Mr Festus Osifo, revealed that rehabilitation work on the plant is about 90 percent complete. According to him, the facility now meets the basic technical requirements to operate, leaving the final decision in the hands of the Nigerian National Petroleum Company Limited (NNPCL).

Osifo explained that the refinery’s continued shutdown is not due to mechanical faults, but to concerns over whether the business case makes sense in the current market.

“The plant can be switched on immediately and it will run,’ he said. “However, the NNPCL must look at the numbers. They are not just operators — they are a commercial company, and profit is a major factor. Once they decide, the refinery can be back in operation within a week.”

He warned that the cost of crude oil could exceed the value of the refined products, making the operation financially unattractive.

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“If you load crude oil valued at about $5 million into the refinery, the products you get after refining may only be sold for roughly $4.5 million,” Mr Osifo said, describing the situation as a major challenge to resuming production.

Despite the concerns about profitability, Mr Osifo stressed that the massive funds invested in the rehabilitation were not wasted. He said the work done has significantly upgraded the facility’s core systems and equipment.

He noted that major components such as compressors, control rooms, and electrical panels were replaced, and that the infrastructure remains in place.

“The contractors did not remove the equipment. The refinery is now in a far better state than it was before,” he said.

Mr Osifo also said the upgrades have increased the refinery’s overall asset value. “Today, the Port Harcourt refinery is worth much more than it was prior to the rehabilitation exercise,” he added.

The refinery was formally reopened in November 2024 after rehabilitation, but operations were halted again in May 2025 following technical and operational challenges. Since then, production has remained suspended, with no official restart date announced by NNPCL.

Analysts have wondered why this explanation is coming from a labour leader, and not the Nigerian government. However, Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, Mr Bayo Ojulari, said last week that Nigeria’s state-owned refineries collapsed because the company failed to prioritise how the plants would actually be run.

“You end up with financing, EPC and O&M contracts, all taking money out of the system, but none truly invested in its long-term success,” he said. “There is no way a business like that can survive. The system was designed to take, not to build.”

He said the current NNPC leadership is now trying to correct that imbalance by focusing on operational readiness from the earliest stages of projects.

Drawing from his experience in international oil companies, Mr Ojulari said large energy projects appoint an ‘operational assurance’ lead from day one to ensure that whatever is built can be safely and efficiently operated.

READ ALSO: NNPC: $3bn spent under Kyari, but Ojulari now says refineries were burning cash

The NNPCL under former Group Managing Director, Mr Mele Kyari, spent nearly $3 billion on the rehabilitation of Port Harcourt, Warri and Kaduna refineries but none is working. It spent $1.5 billion on Port Harcourt refinery despite repeated pieces of advice by financial experts to offload the inefficient refinery.

“After gulping $1.5bn, the Nigerian National Petroleum Company Limited has now admitted that reopening the Port Harcourt Refinery is a waste of scarce resources. This belated admission validates my long-held position that Nigeria’s refineries should be privatised,” former Vice President, Atiku Abubakar, wrote in a Facebook post.

“For years, I advanced this patriotic position and was vilified and accused of plotting to sell public assets to ‘friends.’ Today, the facts have caught up with the rhetoric. Decades of so-called turnaround maintenance have swallowed billions of dollars with nothing to show for it, exposing deep deficits in capacity, technical know-how, and financial discipline.”