NNPC Leader Criticizes Refinery Investment

Group Chief Executive Officer of NNPC Limited, Engr. Bayo Ojulari, declared the reopening of the Port Harcourt Refinery and Petrochemical Company a significant waste of resources. Ojulari made these remarks on Wednesday at the 2026 Nigerian International Energy Summit in Abuja. He stated the national oil company currently lacks the capacity to operate the facility efficiently.

Ojulari's comments directly challenge Nigeria's long-standing refinery rehabilitation strategy. The Port Harcourt complex underwent a ₦148 billion ($320 million) refurbishment completed in 2024. This project aimed to restore the refinery to 90% of its 210,000 barrels per day capacity. The Nigerian government allocated these funds through the Petroleum Industry Act implementation budget.

Why the Refinery Struggles

The Port Harcourt refinery has faced operational challenges for over a decade. It processed less than 30% of its capacity in 2023 according to NNPC operational reports. Technical audits by the Nigerian Midstream and Downstream Petroleum Regulatory Authority identified outdated equipment as the primary issue. Maintenance costs exceeded ₦15 billion ($32 million) annually since 2022.

Nigeria continues to import approximately 85% of its refined petroleum products despite having four national refineries. The Dangote Refinery in Lagos began operations in 2025 with 650,000 barrels per day capacity. This private facility now supplies 40% of Nigeria's domestic fuel needs according to the National Bureau of Statistics.

Why It Matters

Ojulari's statement signals a potential policy shift for Nigeria's energy sector. The government spent over ₦400 billion ($865 million) on refinery rehabilitation between 2021 and 2025. These investments failed to achieve energy security targets. Nigeria's fuel import bill reached $8.3 billion in 2025 according to Central Bank of Nigeria data.

Businesses face continued uncertainty about domestic fuel supply. Manufacturing companies like Dangote Group and BUA Group maintain private fuel arrangements. Small and medium enterprises pay premium prices for unreliable supply. The Manufacturers Association of Nigeria reports energy costs consume 40% of production expenses for member companies.

What Businesses Should Watch

Monitor NNPC's upcoming strategic review expected in Q2 2026. The company may propose alternative uses for refinery assets. Potential options include conversion to storage facilities or petrochemical production units. The Nigerian Content Development and Monitoring Board will influence any asset repurposing decisions.

Track licensing rounds for modular refinery operators. The Federal Government approved 35 modular refinery licenses in 2025. Only 12 became operational by year-end. Companies like Waltersmith Petroman and Niger Delta Petroleum Resources expanded capacity successfully. Their models demonstrate viable alternatives to large-scale rehabilitation.

Watch for increased private sector participation in downstream operations. The Dangote Refinery success encourages other investors. BUA Group announced plans for a 200,000 barrels per day facility in Akwa Ibom State. This project requires approval from the Nigerian Upstream Petroleum Regulatory Commission.

Market Implications

Ojulari's assessment reflects broader challenges in Nigeria's energy transition. The country aims to achieve net-zero emissions by 2060 under its Energy Transition Plan. Aging refinery infrastructure conflicts with these environmental goals. The National Council on Climate Change may recommend accelerated decommissioning of inefficient assets.

International partners observe these developments closely. The World Bank committed $500 million to Nigeria's energy sector reform in 2025. The African Development Bank approved $300 million for renewable energy projects. Both institutions prioritize efficient resource allocation in their funding criteria.

Domestic energy companies face strategic decisions. Oando PLC and TotalEnergies Marketing Nigeria PLC invested in retail networks assuming stable local supply. They now reassess their downstream integration strategies. The Nigerian Stock Exchange All-Share Index declined 2.3% following Ojulari's remarks.

Looking Forward

The Nigerian Senate Committee on Petroleum Resources plans hearings on refinery operations. Committee Chairman Senator Bassey Akpan requested NNPC's detailed operational data. The House of Representatives Committee on Downstream Petroleum also launched an investigation. Both committees aim to complete reviews before the 2027 budget cycle.

Business leaders await clarity on Nigeria's refined products strategy. The Ministry of Petroleum Resources develops a new downstream roadmap scheduled for release in Q3 2026. This document will guide investment decisions for the next decade. It must balance energy security, economic efficiency, and environmental commitments.

Ojulari's frank assessment creates opportunity for honest sector evaluation. Nigeria cannot afford repeated investments in underperforming assets. The country needs sustainable solutions that deliver reliable energy to businesses and consumers. The coming months will reveal whether policymakers embrace this reality.