As efforts intensify to revive Nigeria’s struggling refineries through new technical partnerships, former President Olusegun Obasanjo has reiterated a long-held position: the country’s state-owned refining facilities may never function effectively under current structures.
Speaking during a televised interview on Sony Irabor Live, Obasanjo pointed to systemic inefficiencies, poor maintenance culture, and entrenched corruption as persistent barriers undermining the operations of refineries in Port Harcourt, Warri, and Kaduna. His remarks come at a time when the Nigerian National Petroleum Company Limited continues to seek technical partners to manage these assets more efficiently.
Drawing from past experience, Obasanjo emphasized the success of public-private partnerships, citing the Nigeria Liquefied Natural Gas model as a rare example of effective collaboration between the government and private investors. According to him, such arrangements have consistently outperformed fully government-managed enterprises in Nigeria.
He revealed that during his presidency, attempts were made to привлечe international expertise, including outreach to Shell, to operate the refineries. However, the company declined. Their reasons, he said, ranged from limited profitability in the downstream sector to the relatively small scale and poor condition of Nigeria’s refineries. Concerns over governance and transparency also played a role in their decision.
Obasanjo further disclosed that a breakthrough seemed imminent when industrialist Aliko Dangote offered $750 million to acquire a majority stake in two of the refineries. The deal was completed during his administration but was later reversed by his successor, Umaru Musa Yar'Adua, reportedly under pressure from within the national oil company.
Reflecting on that reversal, Obasanjo suggested that Nigeria missed a critical opportunity to reform its refining sector. He argued that the refineries have since deteriorated further, despite billions of dollars reportedly spent on rehabilitation. Estimates, he noted, indicate that around $16 billion has been invested—an amount approaching the cost of building the privately owned Dangote Refinery from scratch.
Recent developments appear to support concerns about the refineries’ performance. According to the current NNPC Group Chief Executive Officer, Bayo Ojulari, even after undergoing rehabilitation and brief reopening in 2024, the Port Harcourt and Warri refineries were operating below global standards and producing uncompetitive outputs.
Meanwhile, Dangote has maintained that his decision to build a new refinery was influenced by the cancellation of the earlier privatization deal. He has also expressed skepticism about the long-term viability of the existing state-owned plants.
With a new deadline set for mid-2026 to finalize technical partnerships, the future of Nigeria’s refineries remains uncertain. Whether the current strategy can overcome decades of structural challenges—or validate Obasanjo’s warnings—will likely shape the trajectory of the country’s downstream oil sector for years to come.