₦airaland Forum

The announcement of the shutdown of the Port Harcourt Refining Company (PHRC) otherwise known as Port Harcourt Refinery by the Nigerian National Petroleum Company Limited (NNPCL) has continued to generate angry reactions from industry stakeholders and analysts who reiterated calls for a full privatisation of the government-owned refineries to achieve efficiency and optimisation in the operation of the refineries.

On Friday, the NNPCL announced the shutdown of the refinery with effect from Saturday for scheduled maintenance. This is coming six months after the refinery commenced truck loading of petroleum products following a rehabilitation programme that gulped $1.5 billion.

Chief Corporate Communications Officer, Femi Soneye, who confirmed the shutdown in a statement, added that the shutdown was part of a planned maintenance and sustainability assessment aimed at ensuring optimal performance of the facility.

The statement reads: “The Nigerian National Petroleum Company Limited (NNPC Ltd) wishes to inform the general public that the Port Harcourt Refining Company (PHRC) will undergo a planned maintenance shutdown.

“This scheduled maintenance and sustainability assessment will commence on May 24, 2025. We are working closely with all relevant stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), to ensure that the maintenance and assessment activities are carried out efficiently and transparently. NNPC Ltd remains steadfast in its commitment to delivering sustainable energy security.”

What To Know About the Refinery?
When the refinery was revamped in November 2024 after the rehabilitation programme, there were doubts about the operation of the refinery amidst allegations that it was a mere blending plant.

But the NNPCL insisted that the 60,000 barrels per day Old Port Harcourt Refinery was up and running, with loading operations in full swing, contrary to insinuations in certain quarters.

The Port Harcourt Refineries consist of two units, with the old plant having a refining capacity of 60,000 barrels per day (bpd) and the new plant 150,000 bpd, both summing up to 210,000 bpd.

The refinery was shut down in March 2019 for the first phase of repair works after the government secured the services of Italy’s Maire Tecnimont to handle the review of the refinery complex, with oil major Eni appointed technical adviser.

The Port Harcourt refineries are among the four refineries operated by the national oil company, which has gulped billions of dollars in turnaround maintenance (TAM). The other refineries are the Warri and Kaduna refineries.

The Port Harcourt refinery, which was shut down for maintenance, had gulped over $1.5bn for rehabilitation.

In fact, the federal government had spent billions of dollars on the refineries amidst calls for privatisation to reduce the amount of public spending on the refineries.

In May 2023, the House of Representatives Ad-hoc Committee on the State of Refineries in the country said the federal government spent over N11 trillion on the rehabilitation of the refineries from 2010 to 2023.

Case for Privatisation
Daily Trust reports that the debate over the privatisation of the refineries had raged over the years. Former President Olusegun Obasanjo had sold the refineries to a group of private investors led by the President of Dangote Industries Limited, Alhaji Aliko Dangote, at $750m, but the money was refunded to them by his successor, late Alhaji Umar Musa Yar’Adua.

An investment analyst, Nnaemeka Obiaraeri, said the government should stop wasting money on the refineries, saying billions of naira had been sunk into the four state-owned refineries without results.

According to him, the decision by former President Obasanjo to sell off the refineries was the best and shouldn’t have been reversed.

In an interview on News Central monitored by our correspondent, he said, “We keep on wasting our time in this country, we keep on romancing and praising the incompetence and inefficiency in the public sector. We keep on wasting our precious time as a nation.

“The truth is, and I dare repeat it again. We wasted billions of dollars, trillions of naira, trying to fix these refineries since 1999. Obasanjo did the right thing in 2007 when he privatised the refineries to the team led by Aliko Dangote, Femi Otedola and the rest of the corporate czars.”

He claimed that N4 trillion was wasted under the last NNPC leadership on the refineries. He added, “Of course, it has always been said that the thing (Port Harcourt refinery) was not revived; they only did it to be a blending plant.

The truth is that those refineries will never work under the public sector control of the NNPC. For those refineries to work, we must do what we did at the Eleme Petrochemical Plant. The federal government must sell 80 per cent of the NNPC shareholding in those refineries to deep-pocketed private sector investors who would take 30 per cent, then the rest to Nigerians.

“Sell 50 per cent to Nigerians, list on the floor of the exchange and I tell you this, within the next one year, those refineries would begin to operate at optimum capacity. Dangote started its own refinery in 2015 and today, it is the largest single train refinery in the whole world, moving efficiently, no stories, no games.”

According to him, Kaduna Refinery should be scrapped and turned to a depot because the gas supply channel has been compromised.
He said both Warri and Port Harcourt would “Become an investors’ delight to buy those refineries.”

“Those refineries have existing facilities. To collocate a brand new 160,000-barrel-a-day refinery would take about $8bn. Because of the already existing facilities within Warri and Port Harcourt, it would cost that amount of money.”

"Shutdown Unexpected"
On his part, former Secretary of the Independent Petroleum Marketers’ Association of Nigeria (IPMAN), Mike Osatuyi in a chat with our correspondent described the shutdown of the Port Harcourt Refinery as an embarrassment to the government and Nigeria as a country.

In a chat with our correspondent, Osatuyi stated that the NNPC needs to come out openly and explain what led to the shutdown.
He said, “It is an embarrassment to the government and Nigeria. We felt it was brand new. We didn’t expect it to be shut down like that. What is worth doing at all is worth doing well. After postponing the opening more than six times, they need to come and explain to Nigerians what the problem is.”

According to him, the amount spent on turnaround maintenance is enough to build two brand new refineries at a time naira still had value. “This amount is more than what we can use to build two refineries when the naira still had value. This is where we are. Because it is government property and government business, people do what they like. If it were a private business, it would not be like this. Only God knows how much they would come up with to bring it back again.

“We don’t have a conscience. If we have conscience, we cannot spend $1.5bn and then, you come back to complain. This wasn’t how it was in the 70s.” Osatuyi stated that the coming of the Dangote Refinery in Ibeju-Lekki, Lagos, was the saving grace for Nigerians.

“With Dangote coming up, we are self-sufficient in terms of local consumption. Dangote can load 2,800 trucks per day with two gantries. He has the capacity and what it takes to meet up with our demands,” he added.

"Incompetence Behind Shutdown."
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) said the real reason behind the shutdown of the refinery after spending $1.5 billion on its rehabilitation is incompetence.

The National President of PETROAN, Billy Gillis-Harry, said, “The shutdown of the state-owned refinery showed that the managers of Port Harcourt Refinery are incompetent and insincere all along,” he said.

It would be recalled that the Host Community Petroleum Bulk Retailers of Port Harcourt refinery Depot through its Board of Trustees’ Chairman, High Chief Sunny Nkpe had earlier raised an alarm over what it called “sinister motive” to shut down the refinery.