NNPC CEO Bayo Ojulari Considers Refineries Sale Amid Mounting Rehabilitation Setbacks
Nigeria’s push to revive its ailing oil refineries may soon take a dramatic turn, as Bayo Ojulari, Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, signals a possible sale of the state-owned assets. Ojulari’s remarks come amid renewed scrutiny of the billions spent trying to resuscitate the aging facilities, with little to show for it so far.
Speaking with Bloomberg on the sidelines of the 9th OPEC International Seminar in Vienna, Austria, Ojulari pulled no punches about the tough reality confronting the national oil giant. He admitted that efforts to bring back the refineries, once the pride of Nigeria’s oil economy, have become far more complicated than initially expected.
Why Nigeria’s Refinery Rehabilitation Failed Despite Huge Spending
Despite the huge sums spent on rehabilitating the refineries, the results have fallen short. The Port Harcourt refinery briefly resumed crude oil processing on November 26, only to shut down again in May for more maintenance. Warri and Kaduna still remain under construction. According to NNPC’s CEO Bayo Ojulari, old equipment, outdated technology, and unexpected complications have made the job tougher than expected.
Ojulari told Bloomberg that some new technologies have not delivered as planned and acknowledged that reviving abandoned refineries has proven more complex than the company anticipated.
“So refineries, we made quite a lot of investment over the last several years and brought in a lot of technologies. We’ve been challenged,” Ojulari said. “Some of those technologies have not worked as we expected so far. But also, as you know, when you’re refining a very old refinery that has been abandoned for some time, what we’re finding is that it’s becoming a little bit more complicated.”
Refinery Sale Now on the Table
In a candid admission, Ojulari confirmed that NNPC is reassessing its entire refinery strategy, with all options on the table, including a potential sale of the refineries. The review will conclude by the end of the year.
“So we’re reviewing all our refinery strategies now. We hope before the end of the year, we’ll be able to conclude that review. That review may lead to us doing things slightly differently,” he said.
Pressed on whether this means a sale could happen, Ojulari said: “Sale is not out of the question. All the options are on the table, to be frank, but that decision will be based on the outcome of the reviews we’re doing now.”
Nigeria’s Oil Production Costs Still a Major Hurdle
Beyond the refinery woes, the cost of producing crude oil in Nigeria remains steep. Ojulari revealed that operating expenses average between $20 and $30 per barrel, driven up by massive investments to secure pipelines against vandalism and oil theft.
“Part of that is because of the investment we’ve had to make in terms of security of our pipelines, which today we have 100 percent availability of. That came out of significant investment,” he said.
What’s Next for Nigeria’s Oil Sector?
Ojulari hopes the country can boost crude output to 1.9 million barrels per day by year-end, but analysts warn that without a sustainable refining strategy, Nigeria will continue to lose billions on fuel imports.
As the review unfolds, citizens and industry insiders alike are watching to see if selling the refineries will finally break decades of inefficiency or if this will open another chapter of controversy in Nigeria’s complex oil story.
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