The Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Bayo Ojulari, revealed yesterday that Nigeria was losing between $300 million and $500 million monthly during the period the Port Harcourt Refinery was in operation.
He said: “When I resumed, one of the first priorities I focused on was the refinery. I did a quick review to see if we could quickly fix it. What I found is that we were losing between $300 million to $500 million on a monthly basis in the refinery. We were pumping about 50,000 barrels of crude to go into the refinery. What was coming out was less than 40 per cent equivalent of what was coming in.”
Ojulari said this when he met with the leadership of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in his office at Abuja.
The Port Harcourt Refinery, after years of being in comatose, started working in November, 2024 when former GCEO Mele Kyari announced the reopening to a wide applause by Nigerians, but the operation was halted in May, barely one month after Ojulari’s resumption.
Ojulari, who assumed office on April 2, the same day Kyari was relieved of the job, said he halted the operation of the refinery to prevent further losses and work towards a sustainable arrangement.
Ojulari explained: “The first thing we said was rather than continue to lose, let’s quickly stop and look for a way to put this refinery into a sustainably profitable venture.”
He said the NNPCL was working to revive the moribund refineries to operate at full capacity by adopting the Nigeria Liquefied Natural Gas (NLNG) model (Public, Private, Partnership), which PENGASSAN advocated during the meeting.
The NNPCL chief said talks were on to find a viable solution to the refining crisis, ensuring the refineries become a sustainably profitable venture.
He said the national oil company had concluded a technical review for the three refineries, pointing out that the long term neglect and lack of maintenance were major reasons behind the huge losses recorded monthly, despite the huge investments to make them work
The NNPCL chief explained that a lot of money has been spent on these refineries, but admitted that it’s been challenging to translate those funds into profitability.
He likened the situation of the refineries to parking an old car for some time without any greasing and oiling. He added that the Port Harcourt refinery has been difficult to put back because of years of neglect and it’s been difficult: when you fix one thing, the other thing is still there.
Turning to PENGASSAN, Ojulari said: “The solution you are proposing (the NLNG model) is what we are working on. We’ve completed technical review of the three refineries, but it’s not just about technical. It’s also about commercial viability, it has to make money. Maybe not a lot, but it should not be making a loss.
“We’ve completed the commercial review for the Port Harcourt refinery and from that commercial review, we have come to the conclusion that the best way forward is to get a true professional refinery company to join us and co-operate with us.
“We’ve been having meetings with potential parties, but we need to find the pathway that will work. We’ve also realised that it was not in the best interest of Nigeria, not in the best interest of NNPCL, that we will continue to put money into a place where we do not have the full ability to fully operationalise. So, when we bring in partners, we can work with them.”
Ojulari appealed to Nigerians, contractors, traders and beneficiaries to be patient with the shutdown of the refineries.
In the course of the briefing, the NNPCL chief said his team was facing attacks, but said he will not be deterred. “We are under attack. We will not budge to short-term pressure, as it will not be in the best interest of Nigerians. You cannot drive change without a price, and the transformation is tough,” he said, adding that patience will be required from Nigerians to get to the other side of change, which will benefit the citizens.
He restated his commitment to stay focused in driving the mandate given to the team by President Bola Ahmed Tinubu.
“Tinubu did not put pressure on me to go and do the wrong thing. The baseline was to go and ensure that whatever we’re doing, going forward, sustainably works. There’s no need for us to pretend, there was no negative political pressure for NNPCL to just continue to run at a loss, so we decided to freeze on it, and we’ve been working astutely fine.
“My commitment is that when this refinery is reworking, everybody will be back to work but for now, we all need to co-operate and work together to ensure that whatever we put in place is sustainable.”
Ojulari declared that he is not a politician, saying that he will have to learn a bit more about politics. “I’m not hiding from anybody. I’m not a politician. I will have to learn a bit more about politics, but for me, it is a development plan, and I’m ready to learn.”
The NNPCL chief raised concerns about threats to his life, and some members of the company’s management, saying his major “offence” was the reforms he introduced in the oil and gas sector in line with President Tinubu’s directive to revive the country’s ailing refineries. He said some powerful interests were plotting to unseat him, but insisted that he remained focused on ensuring the success of the refinery rehabilitation plan.
Osifo said the pipelines have been working optimally since Ojulari became the GCEO, leading to an increase in production.
He commended the management of NNPCL for moving beyond addressing the welfare of members.
While seeking answers to the reasons behind the shutdown of the refineries, Osifo noted that PENGASSAN was committed to supporting the NNPCL to stabilise the system, which has been bedevilled with so many challenges, including non-producing fields, to boost production to 2.6 million barrels per day next year.
The PENGASSAN president, who is also president of the Trade Union Congress (TUC), said: “Managing institutions as this and trying to bring about change, we know that there are always ups and downs, which is expected in life. But at PENGASSAN, we assure you that we are solidly behind you, that we will work with you, we will collaborate with you and your team to ensure the stability of the system, because for us, when the system is not stabilised, it has a way of trickling down to our members.
“We will work with you to ensure that the system is stabilised and to ensure that NNPCL continuously remains vibrant, the way it has been, and even to take it a notch higher, because today we are doing approximately 1.8 million barrels of crude.
“We believe that with a lot of capacities and experience that will be brought in, we’ll be able to bring about an improvement in our production”.
The tale surrounding the new development with the nation’s refineries, as painted by Ojulari, runs counter to that of his predecessor, Mele Kyari, who described the reopening of the Port Harcourt Refinery Company in Novembe,r 2024, as a monumental achievement for Nigeria, which signified a new era of energy independence and economic growth for the country.
In a statement, Kyari had said: “The Nigerian National Petroleum Company Limited (NNPCL) has fulfilled its pledge of re-streaming the Port Harcourt Refining Company (PHRC), signalling the commencement of crude oil processing from the plant and delivery of petroleum products into the market.”
Ojulari’s briefing yesterday is coming barely nine months after the Port Harcourt Refinery was adjudged fit for production by Kyari.
