Why NNPC Refineries Will Never Work Again — Obasanjo

Former President Olusegun Obasanjo has restated his position that Nigeria’s state-owned refineries will not return to effective operation, despite ongoing rehabilitation efforts by the Nigerian National Petroleum Company Limited (NNPC).

He made the remarks during a televised interview on *Sony Irabor Live* on Saturday, where he reviewed past attempts to fix the Port Harcourt, Warri, and Kaduna refineries and Nigeria’s broader downstream oil strategy.

Obasanjo argued that Nigeria’s most effective energy model remains the joint-venture structure used in the Nigeria LNG project, where private participation plays a dominant role. He contrasted this with the government-run refinery system, which he said has consistently underperformed.

He referenced previous attempts to bring in international operators, including discussions with Shell, to manage the refineries under equity or service arrangements. According to him, the company declined both options, citing limited profitability in downstream operations, the small scale of Nigeria’s facilities compared to global standards, poor maintenance practices, and corruption risks around refinery management.

Obasanjo also revisited a proposed deal during his administration involving Aliko Dangote, President of Dangote Group, who reportedly offered about $750 million to acquire controlling stakes in two refineries. He said the agreement was concluded but later reversed after a change in government.

He claimed that pressure from the NNPC influenced the decision to cancel the arrangement under the administration of the late President Umaru Musa Yar’Adua. He added that continued state control has led to repeated failed rehabilitation efforts and significant expenditure without corresponding output.

Obasanjo further stated that funds spent on refinery rehabilitation over the years have approached the cost of building large-scale private facilities, referencing comparisons with the Dangote refinery project.

The NNPC Limited has not issued a response to the latest comments.

The company is currently working toward selecting technical partners to operate the refineries, with a target timeline set for June 2026. Despite previous rehabilitation and brief restarts in 2024, the facilities have struggled with output levels and competitiveness in the downstream market.