By Dimeji Bassir
Transparency seems to be replacing obfuscation at NNPC following the recent leadership change — a move driven by a bold reform agenda from Nigeria’s President. The new team certainly has their work cut out for them, and NNPC could not be in more experienced hands. The incoming Group CEO, a highly respected upstream professional, has hit the ground running and assembled a strong team to help execute his first 100-day plan — a comprehensive value assessment of the business to pinpoint gaps between its current baseline and its full potential.
The new leadership were handed bold mandates which are to:
- Sustain base production and deliver incremental barrels
- Increase gas capacity utilization and attract strategic investments
- Deepen refining capacity and expand CNG penetration
- Enhance Liquidity and become a global brand.
But there’s a snag. Mr. Ojulari was a technical expert before transitioning into management — a path that eventually saw him lead Shell’s Nigerian deepwater operations. In his new role at NNPC, it’s reasonable to expect that his network of subject matter experts will be extensive, but predominantly made up of upstream talent.
Expanding refining capacity in Nigeria is a bold, ambitious — yet necessary — objective, given its huge social implications for ordinary Nigerians. However, a lack of deep domain expertise, ingrained cultural inefficiencies and chronic corruption have kept the refineries trapped in a persistent cycle of underperformance.
Following a much-publicized $3Billion “revamp,” the four government run refineries remain completely non-operational — exposing the effort as little more than a costly charade while a teeming population yearning for refined products remain underserved.
The Dangote Refinery has somewhat eased some pressure on the sector but PMS availability at NNPC retail stations remained a dismal 54% in April 2025, according to NNPC Limited’s own monthly report.
The same report indicated that the Port Harcourt, Warri and Kanduna refineries were currently under review but what exactly does that mean?
Driving sustainable change in the sector will require a much broader base of expertise and thoughtful intervention if there’s to be any meaningful impact.
The Fundamentals
A refinery’s utilization drives throughput and is also positively correlated with profitability.
Utilization is defined as the ratio of a facility’s actual output to its nameplate capacity — the maximum output it could achieve if operating at 100% throughput continuously. For refiners, the worst-case scenario occurs when utilization is low but reliability spending remains high — meaning significant resources are being spent to deliver subpar performance. Conversely, the ideal scenario is high utilization with minimal reliability costs.
Unfortunately, Nigeria remains firmly stuck in the worst-case scenario: between 2010 and 2018, the country’s four refineries operated at an average utilization rate of just 15%, while over $25Billion was spent on repairs and maintenance in the 13 years leading up to 2023. Unsurprisingly, the Port Harcourt Refining Company posted five consecutive years of losses between 2013 and 2018, amounting to over ₦200Billion—a significant blow to the plant’s valuation, particularly if the widely debated option of selling the asset were to be considered.
“ As goes asset availability, so goes the business “.
It’s clear that there is no viable business ongoing at NNPC’s four refineries, especially in the wake of yet another failed revamp effort.
A lingering debt overhang from the loans secured in 2021 to finance the latest round of refinery “revamps”—loans expected to be repaid from the proceeds of refined product sales—further complicates an already dire situation, especially with the refineries still non-operational.
Sometimes the way forward is a U-turn
Optimization of plant asset performance and reliability is essential to meeting the challenge of increasing production and lowering costs by asset intensive organizations. Successful plant asset optimization requires the strategic integration of proven technologies, maintenance best practices, and reliability methodologies in a coordinated, sustainable programme that includes culture change.
As recently as a decade ago, there was little industry consensus among experts on what constituted effective asset availability practices in maintenance and reliability. If you asked about the traits of top performers—those who had successfully improved the operational performance of physical assets while reducing overall production and maintenance costs—you’d likely receive different answers depending on whom you asked. Fortunately, that has changed. Today, there is far greater awareness at the executive level, along with clear, consistent guidance from top performers and broad agreement among industry experts on the proven patterns of excellence.
The top priority for the Bayo Ojulari–commissioned task force, charged with unlocking value from NNPC Limited’s downstream assets, is to pause all current activities and conduct a comprehensive and structured assessment followed by an implementation (gap closure) plan at all four plants. This exercise must be led by individuals with deep expertise in the proven methodologies that drive high performance consistently.
The purpose of the Assessment and Implementation Plan is to provide NNPCL leadership with a reliable account of the current state of asset availability at each refinery and to assist in the development of a plan to implement best practice operations, maintenance, and reliability programs. The Assessment seeks to identify gaps, which, if closed properly, would result in substantial financial, and business benefits, including maintenance spend and inventory reductions, increase in asset availability, utilization and product yield, amounting to significant annual sustained benefits.
It illuminates at the corporate executive suite level, the contribution to financial and business performance improvements that can come from improved levels of physical asset reliability.
The Gap Analysis comprehensively evaluates current operations, maintenance and organizational practices relative to world-class performance in the following general areas:
- Facility Management
- Work Management
- Material Management
- Information Management
- Management Support
- Engineering Information Management
These areas are further subdivided into the following subcategories:
- Organizational Structure
- Policies & Procedures
- Facility Programs
- Facility Material Condition
- Planning & Scheduling
- Work Control
- Maintenance Procedures
- Post Maintenance Testing
- Procurement
- Warehousing
- Maintenance History
- CMMS Availability / Effectiveness
- Management Involvement
- Corporate Support
- Engineering Information
- Problem / Trouble Analysis
A key deliverable for the team tasked with unlocking value from NNPC-owned refineries is to produce a value and cost optimization report, along with clear, actionable recommendations for the way forward. Achieving this goal for the new CEO, and by extension, the President, requires a paradigm shift. One rooted in a cultural reawakening and deep self-awareness of the critical knowledge gaps that continue to hinder not just the organization, but the country as a whole.
