NNPC Refineries Will Never Work – Obasanjo Reignites Oil Sector Debate

Former President of Nigeria, Olusegun Obasanjo

NNPC Refineries Will Never Work – Obasanjo Reignites Oil Sector Debate

Former President Olusegun Obasanjo has restated his long-standing criticism of Nigeria’s state-owned refineries, insisting that the facilities under the Nigerian National Petroleum Company Limited (NNPC Ltd) will “never work,” despite ongoing rehabilitation efforts and billions of dollars reportedly spent over the years.

Obasanjo made the remarks during a televised interview on Sony Irabor Live, where he reviewed past attempts to revive Nigeria’s refining sector and argued that government-managed refineries have consistently failed due to inefficiency, corruption, and poor maintenance culture.

He maintained that only a strong public-private partnership (PPP) model can deliver sustainable results in the oil and gas downstream sector, pointing to the success of Nigeria LNG (NLNG) as proof that private sector participation improves performance and accountability.

Obasanjo said Nigeria’s refineries remain structurally weak and mismanaged, stressing that repeated government interventions have failed to yield results. According to him, “NNPC refineries will never work,” adding that the system has been weighed down by decades of poor maintenance practices and institutional inefficiencies.

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The former president recalled efforts during his administration to bring in international oil companies, including Shell, to manage Nigeria’s refineries either through equity participation or operational control. He said Shell declined the offers, explaining that their downstream operations were not major profit drivers and that refinery management presented significant operational and structural risks. Obasanjo also said Shell raised concerns about Nigeria’s refinery capacities, which he described as relatively small compared to global standards, as well as issues of poor maintenance, corruption, and reliance on unqualified personnel.

Obasanjo further disclosed that business mogul Aliko Dangote once offered about $750 million to acquire a controlling stake in two of the refineries and manage them under a private sector arrangement. He said the proposal was initially accepted during his tenure but was later reversed after he left office, following pressure on the succeeding administration from NNPC leadership. According to him, the reversal contributed significantly to the continued decline of the refineries, which he believes have lost much of their value over time.

He also claimed that Nigeria may have spent as much as $16 billion on refinery rehabilitation efforts over the years, yet the facilities remain largely inefficient and commercially uncompetitive. He compared this figure with the cost of building modern private refineries, arguing that the country has spent enough to construct world-class facilities but has failed to achieve functional output.

Despite the criticism, the NNPC continues efforts to revive the Port Harcourt, Warri, and Kaduna refineries through the engagement of new technical partners. Officials have acknowledged that although some of the refineries briefly resumed operations in 2024 after rehabilitation, they are still operating below international standards and remain economically uncompetitive compared to private refineries. The NNPC has set a target of June 2026 to conclude the selection of technical partners to manage the facilities and improve operational efficiency.

The debate over Nigeria’s refining future has intensified following the emergence of the privately owned Dangote Refinery, widely regarded as Africa’s largest single-train refinery. Industry observers say the contrast between private and state-owned refinery performance continues to fuel arguments in favour of private sector-led management of critical energy infrastructure.

The NNPC has not issued an official response to Obasanjo’s latest comments at the time of filing this report.