NNPC blames refinery failures on weak operations, not funding
The Nigerian National Petroleum Company Limited (NNPC) has attributed the long-standing underperformance of the country’s state-owned refineries to weak operational capacity rather than inadequate funding or failure by engineering contractors.
Speaking at the 2026 Nigerian International Energy Summit in Abuja, NNPC Group Chief Executive Officer, Bayo Ojulari, said billions of dollars had been spent over the years on financing arrangements and engineering, procurement and construction (EPC) contracts, yet little attention was paid to how the refineries would be efficiently operated over their long lifespans.
Ojulari explained that excessive focus on financing and construction had come at the expense of building strong operational systems. According to him, while financiers and EPC contractors typically exit after project delivery, the responsibility of running refineries for decades is often neglected.
READ ALSO: NNPC raises petrol pump prices to ₦835 in Lagos and ₦839 in Abuja
“Everybody focused on financing and EPC. The financier gets paid, the EPC contractor delivers and moves on. Then you are left to run the refinery for the next 20 or 30 years, and that is where we failed,” he said.
He stressed that refineries are long-term businesses that require world-class operational excellence, continuous skills development and deep institutional knowledge. Without these, he noted, operations and maintenance contracts become cost centres with little accountability or skills transfer.
“When you don’t have the capability to supervise O&M providers, it becomes another contract draining resources. No business can survive that way,” Ojulari added.
Under a new board-approved strategy, the NNPC boss said the company is seeking partnerships with experienced global refinery operators rather than contractors or purely financial investors. He clarified that the approach does not amount to asset disposal but involves selectively selling down equity to bring in partners with strong operational expertise and long-term commitment.
READ ALSO: NNPC confirms new oil well discovery, boosts Nigeria’s energy prospects
“We are not looking for money. We are looking for people who know how to run refineries,” he said.
Ojulari disclosed that discussions are already ongoing with potential partners, including a major Chinese refining company, with technical teams expected to visit one of Nigeria’s refineries soon. He said the extent of equity dilution would be determined by what is necessary to ensure sustainability, adding that the objective is to run refineries as self-financing commercial entities rather than government-dependent projects.
He noted that the same operational philosophy would guide Nigeria’s broader downstream and gas strategy, including collaboration with domestic refineries under the naira-for-crude arrangement and a renewed drive for gas-led industrialisation.
READ ALSO: $2.8bn AKK gas pipeline to become operational in 2026 — NNPCL Chief
Meanwhile, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has renewed its call for full optimisation of the Dangote Petroleum Refinery, describing it as critical to meeting domestic fuel demand and restoring confidence in the market.
The Authority’s Chief Executive, Saidu Mohammed, said the 650,000-barrels-per-day facility represents a structural solution to decades of fuel import dependence, supply instability and regulatory distortions. While acknowledging that the refinery already supplies a significant share of Nigeria’s fuel needs, he stressed that sustained and optimal utilisation is essential to achieving lasting energy security.
Mohammed said ongoing downstream deregulation under the Petroleum Industry Act, rising domestic refining capacity and broader macroeconomic reforms — including naira-based crude and product trading — have helped stabilise supply and reduce fiscal leakages running into trillions of naira.
He expressed optimism that the completion of licensed private refineries and the rehabilitation of state-owned plants, combined with regulatory predictability, would attract more investment into the sector.
READ ALSO: Onyi Sunday appointed General Manager, Strategic Communications, NNPC Ltd
Similarly, Nigeria’s upstream regulator and industry operators projected a more business-friendly oil and gas environment, citing improved regulatory certainty, faster approvals and smarter partnerships.
The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Oritsemeyiwa Eyesan, said early regulatory interventions had cleared delayed approvals and restored additional production for a major local operator. She said the Commission’s focus is on enabling business growth through clear rules, efficient permitting and predictable engagement, with the aim of sustaining production above 1.7 million barrels per day and moving towards the federal government’s two-million-barrel target.
On investment, Eyesan said the ongoing licensing round offering 50 oil and gas blocks across the Niger Delta and frontier basins features competitive fiscal terms to attract both local and international investors.
Also speaking, Group Executive Director of Pan Ocean Oil Corporation and the Newcross Group, Dr Bolaji Ogundare, said Nigeria’s strategy of asset diversification, infrastructure development and partnership-driven financing has strengthened sector resilience and supported production growth. He stressed that sustainable hydrocarbon development would depend on locally structured financing, deeper collaboration and balanced regulation.
READ ALSO: NNPCL boss Ojulari allegedly forced to sign resignation letter
In a related development, Dangote Petroleum Refinery & Petrochemicals dismissed reports claiming it imports finished petroleum products, describing the allegations as misleading.
The refinery’s Chief Executive Officer and Managing Director, David Bird, said the facility operates as a large-scale merchant refinery in line with global standards, processing crude oil and intermediate feedstocks into premium fuels and petrochemicals.
Bird explained that the use of intermediate materials is standard practice worldwide and does not amount to importing finished fuels. He said the refinery produces gasoline and diesel that meet strict international environmental and health standards, including low sulphur specifications.
READ ALSO: Top ex-NNPCL official, Paulinus Okoronkwo, faces 25 years in US prison over $2.1m bribery scandal
He emphasised that only fully refined, market-ready products are supplied to the Nigerian market, adding that semi-finished products are unsuitable for vehicles. Samples of both intermediate and finished products were shown to journalists to illustrate the distinction.
According to Bird, the refinery was established to end Nigeria’s exposure to substandard fuels and has since begun exporting products to international markets, reflecting their quality and competitiveness.
He assured Nigerians of sustained product availability, noting that the refinery has helped ease fuel scarcity, stabilise the naira and reduce pressure on foreign exchange, while urging accurate public understanding of modern refining operations.
Follow the Neptune Prime channel on WhatsApp:
Do you have breaking news, interview request, opinion, suggestion, or want your event covered? Email us at neptuneprime2233@gmail.com
