The Nigerian National Petroleum Company (NNPC) Limited was losing as much as N500 million every month on operations at the Port Harcourt refinery before rehabilitation works were suspended, according to the company’s group chief executive officer, Bayo Ojulari.
Ojulari disclosed this on Thursday in Abuja while receiving a delegation of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) led by its president, Festus Osifo. He said efforts to revive the plant have been hampered by years of neglect, which left the facility in a state where repairing one unit often revealed new challenges in others.
“When you fix one thing, the other thing is still there. So, it’s been very difficult to get it,” Ojulari said.
According to him, one of his priorities on assuming office was to carry out a rapid review of the refineries. That exercise revealed that the company was losing between N300 million and N500 million monthly from refinery operations, with Port Harcourt being a major source of the drain.
Ojulari explained that about 950,000 barrels were pumped to the facility as cargo, but analysis of inputs and outputs showed that less than 40 percent of what went in was being processed effectively. He added that the refinery was only partially operational and producing mid-grade products at a loss because of its structural design.
“The way the refinery was designed, when the old refinery came forward, was that the old refinery was meant to feed into the new for the end product to be of the right standard to the market,” he said.
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Mid-grade output at a loss
Ojulari noted that attempts to rehabilitate the old refinery did not yield the desired results, leaving the company unable to properly produce premium motor spirit (PMS). The mid-grade products that were coming out were also being sold at a loss.
“So the first thing we then said was that rather than continue to lose, let’s quickly stop and look for a way to put the refinery into a sustainably profitable venture, but also a means of sustainable employment,” he added.
No political pressure
The NNPC boss stressed that President Bola Tinubu did not exert pressure on him to take shortcuts with the facility, insisting instead on a sustainable turnaround.
“The mandate I was given is to look at the baseline and ensure that whatever we’re doing going forward sustainably works,” Ojulari said. “There’s no need for us to pretend. So there was no negative political pressure for NNPC to just continue to run at a loss.”
Rehabilitation is still on track
Ojulari said the company has since halted ongoing work at the Port Harcourt refinery while exploring alternatives to make the facility viable. He reaffirmed that despite challenges, NNPC remains committed to completing the high-grade rehabilitation project and has no intention of selling off the refinery.
