NNPCL labels Port Harcourt refinery restart a ‘waste of resources’ after $1.5bn rehab

The Nigerian National Petroleum Company Limited (NNPCL) has described the reopening of the Port Harcourt Refinery as a costly error, saying the company does not currently have the capacity to run refineries profitably.

Speaking at the 2026 Nigerian International Energy Summit, NNPCL Group Chief Executive Officer, Engr. Bayo Ojulari, said a review of the refinery’s operations showed it was running at a “monumental loss,” prompting a shutdown in May 2025 to prevent further financial damage.

The refinery had been rehabilitated at a cost of about $1.5 billion and reopened in November 2024 after nearly three years of work. It was presented at the time as a major step toward reducing fuel imports. Operations lasted only six months before the facility was shut down.

“We were pumping cargo into the refinery every month, but utilisation was around 50 to 55 per cent. Those cargoes have value, and we were losing that value,” Ojulari said. “When you look at the net outcome, we were leaking value, and there was no clarity on how to turn those losses into positive returns.”

NNPCL had earlier stated that the revived plant, located in Eleme, Rivers State, could process 60,000 barrels per day and was producing 1.4 million litres of petrol daily, alongside kerosene, diesel, low pour fuel oil and LPG.

SK Blog reported that the shutdown between May and October 2025 cost the government an estimated $249.7 million over 156 days.

Ojulari said successful refinery operations depend on three elements: adequate financing, competent Engineering, Procurement and Construction support, and strong operational capacity, which he said NNPCL currently lacks.

He said the company’s new approach is to seek experienced refinery operators as partners rather than engage contractors or maintenance service providers.

Ojulari added that the performance of the Dangote Refinery has reduced the urgency to rush decisions on reviving government-owned refineries, as it now provides local refining capacity.

On oil production, he said Nigeria could realistically reach 1.8 million barrels per day in 2026, describing earlier projections above 2 million barrels per day as unrealistic. He noted that average production last year was about 1.7 million barrels per day and warned that over-projection had contributed to fiscal strain when revenues fell short.

Separately, the Chief Executive of the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA), Saidu A. Mohammed, said reduced dependence on imported petroleum products saved Nigeria more than N6 trillion in the first nine months of 2025. He attributed the savings to downstream deregulation, foreign exchange reforms, increased gas utilisation and the operational output of the Dangote Refinery, which he said now meets domestic fuel demand.

Commenting on the refinery pause, petroleum economist Prof. Omowumi Iledare said the decision reflects a value-based reassessment rather than a retreat. He said continuing rehabilitation without addressing the underlying commercial structure would likely deepen inefficiencies and stressed the need for credible partnerships, transparent governance and measurable performance.

Mike Osatuyi, a former General Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said authorities should explain why the refinery failed to operate effectively despite the investment, stating that it never functioned as claimed.