PH refinery 90% rehabilitated, can resume operations within one week, says Osifo

• ‘We are just wasting money,’ insists Ojulari

against the stance of the Group Chief Executive Officer of the Nigeria National Petroleum Corporation Limited (NNPCL), that the Old Port-Harcourt Refinery was in comatose, the President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, yesterday said that the old Port Harcourt Refinery has been rehabilitated to about 90 per cent and could resume operations within one week if the NNPCL gives the approval.

He made the disclosure yesterday while speaking as a guest on a national television programme, noting that the facility is technically ready for operation despite remaining shut since May 2025.

Osifo’s position comes barely one week after the Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, Bayo Ojulari, declared that the continued operations of Nigerian state owned refineries  under the existing structure were destroying value and draining scarce public resources.

“We were just wasting money,” Ojulari said bluntly. “The refineries were leaking value, and there was no clear line of sight on how those losses would ever turn into profits.”

According to Osifo, the decision to restart the refinery is being influenced largely by profitability considerations rather than technical constraints.

He argued: “As of today, you can start the old Port Harcourt refinery and it will function. If NNPCL decides to restart it, within one week it can be brought back to life. However, NNPCL is a profit-driven company, and that consideration is critical,” Osifo said.

He explained that while rehabilitation work on the refinery is largely complete, potential operational losses remain a concern due to the disparity between the cost of crude oil and the revenue from refined products.

“It has been rehabilitated to about 90 per cent. But the challenge is that if you feed crude oil worth about $5 million into the refinery, what you may get from selling the refined products could be around $4.5 million,” he stated.

Despite these concerns, Osifo maintained that funds invested in the rehabilitation were not wasted, stressing that key components of the refinery had been replaced and upgraded.

“Almost all the compressors were changed, the control rooms were changed, and the panels were all replaced. The contractors did not remove these assets. The investment is not a loss,” he said.

He added that the value of the Port Harcourt refinery has significantly improved compared to its condition before the rehabilitation exercise.

“If you assess the refinery today, it is far more valuable than what it was before rehabilitation,” Osifo noted.

But Osifo may have agreed with Ojulari’s economics of refinery operations. “You cannot sleep when you have been trained for decades to look at profitability and commerciality. When you are running an asset that turns crude oil into lower-value products while contractor costs continue to rise, that is not business. That is value destruction,” Ojulari had argued during a chat at the recently concluded Nigeria International Energy Summit (NIES) in Abuja.

Ojulari acknowledged that there was significant public pressure to keep the refineries running, even at a loss. He described the shutdown not as a failure, but as an act of responsible governance. “Halting operations is not failure,” Ojulari insisted. “It is discipline. It is honesty. It is admitting that a system is not working and must be fundamentally restructured.”

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 “The pressure was extreme,” he said. “Nigerians were angry. Expectations were high. But leadership is not about maintaining broken systems for optics. It is about stopping the bleeding and reassessing.”

Between 2010 and 2023, the federal government reportedly spent over ₦11 trillion on refinery rehabilitation and turnaround maintenance. Despite these massive investments, Nigeria remained heavily dependent on imported petrol, diesel, and aviation fuel, placing immense pressure on foreign exchange reserves and exposing the economy to global supply shocks.

In the 1980s and much of the 1990s, NNPC’s refineries operated efficiently, but performance declined in the 2000s as institutional focus shifted away from operational excellence toward EPC contracting, O&M structures, and financing-driven interventions. This transition weakened preventive maintenance culture, increased reliance on turnaround maintenance cycles that proved more commercially attractive to external parties, and contributed to the gradual erosion of in-house operational capacity within NNPC. In this context, the 2025 decision to shut down the refineries represents a pragmatic and necessary step toward halting value loss and enabling a more sustainable long-term reset of Nigeria’s refining framework.