Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Bayo Ojulari, has explained that when he came on board, his leadership team took a decision to halt operations at the country’s refineries to prevent further value erosion
According to him, the state-owned refineries were operating at what he termed a “monumental loss” to the country.
Ojulari stated this during a fireside chat titled “Securing Nigeria’s Energy Future” at the Nigeria International Energy Summit 2026.
Offering insight into the commercial and operational realities confronting NNPC’s refining assets, he admitted that public anger over the refineries was justified, given the scale of public funds invested over the years and the high expectations placed on the facilities.
“On the refineries, Nigerians were angry. A lot of money has been spent, and expectations were very high. So we were under extreme pressure, extreme pressure,” Ojulari said.
He admitted that upon assuming office, refining was not his core area of expertise, having spent most of his career in the upstream sector, but accountability demanded rapid learning.
“My background is upstream, so I was on a vertical learning curve. You are accountable, so you must learn very quickly. Otherwise, there is no escape,” he said.
Ojulari explained that once his management team began a detailed review of refinery operations, the financial reality became immediately clear.
“The first thing that became clear, and I want to say this very clearly, is that we were running at a monumental loss to Nigeria. We were just wasting money. I can say that confidently now,” he said.
He revealed that NNPC was consistently pumping crude cargoes into the refineries each month, yet utilisation levels hovered around 50-55 per cent, resulting in significant value leakage.
“We were spending a lot of money on operations, a lot of money on contractors. But when you look at the net, we were just leaking away value,” Ojulari said.
More troubling, he noted, was the absence of any credible plan to turn the losses around.
“Sometimes you make a loss during investment, but you have a line of sight to recovery. That line of sight was not clear here,” he added.
Consequently, Ojulari said the first major decision of his administration was to halt refinery operations to prevent further losses and allow for a rapid reassessment.
“We decided to stop the refinery and do a quick check. We planned that if things were lined up, we would reopen and work on them,” he said.
He disclosed that part of the value destruction stemmed from the quality of products being produced, citing the Port Harcourt Refinery as an example.
“The crude we were taking into Port Harcourt was producing mid-grade products. When you aggregate their value compared to what you put in, it was a waste,” he said.
Ojulari acknowledged that the decision to halt operations was politically sensitive, noting that NNPC had historically been pressured to keep refineries running to ensure fuel supply continuity.
“There were political pressures to keep the refinery product, lots of pressure. But when you have been trained for over 35 years to focus on commerciality and profitability, you can’t sleep with that,” he said.
Nigeria’s four state-owned refineries, Port Harcourt (two plants), Warri, and Kaduna, have for decades operated far below capacity despite repeated turnaround maintenance exercises costing billions of dollars.
