The Group Chief Executive Officer of Nigerian National Petroleum Company Limited (NNPC Ltd) has defended the decision to pause the rehabilitation of Nigeria’s state-owned refineries, describing the move as a necessary step to prevent further value destruction.
Speaking during a Day 3 interview at the Nigeria International Energy Summit (NIES) 2026, the NNPC boss said continuing to inject funds into refineries operating under inefficient structures would only deepen losses rather than deliver sustainable recovery.
According to him, refinery rehabilitation should be treated as a capital investment decision rather than a symbolic national project. He noted that distressed industrial assets often fail due to structural weaknesses, not merely lack of funding, stressing that without fixing the underlying operating model, additional investment would be ineffective.
The GCEO explained that NNPC is considering commercially driven options such as joint venture partnerships, equity restructuring, and operational reconfiguration to stabilize the refineries. He said these approaches are standard global practices for turning around underperforming public assets, as they introduce shared risk, technical accountability, and performance-based management.
He also emphasized the importance of proper sequencing in the reform process, suggesting that restoring operational credibility should come before any ownership changes. According to him, altering ownership structures without fixing business fundamentals could further erode asset value and weaken investor confidence.
Observers at the summit noted that the remarks marked a rare moment of candor in Nigeria’s public energy discourse, particularly the acknowledgment that existing refinery arrangements have been destroying value. The refinery pause, they argued, signals a shift from managing public perception to confronting economic realities.
However, concerns remain about the risk of prolonged inertia. Analysts warn that the pause must not become an indefinite holding pattern, urging that any partnerships pursued should be credible, governance frameworks transparent, and performance outcomes clearly measurable.
If followed by decisive execution, stakeholders say the refinery reset could represent a turning point in the management of Nigeria’s strategic energy infrastructure—moving away from sentiment-driven decisions toward disciplined value creation.
Energy economist Wumi Iledare, Senior Fellow at the USAEE and Professor of Petroleum Economics, described the development as more significant than the fate of any single refinery, noting that it could redefine how Nigeria approaches public asset management in the energy sector.
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