Former President Olusegun Obasanjo has shed light on the challenges surrounding Nigeria’s refineries, highlighting unsuccessful attempts to privatize them and the subsequent financial losses incurred under government management.
In an exclusive interview with Channels TV, Obasanjo reflected on efforts during his administration to rehabilitate and manage the Port Harcourt, Warri, and Kaduna refineries. He revealed his outreach to international oil companies, including Shell, which ultimately declined to assist.
“I approached Shell to manage our refineries,” Obasanjo recounted. “They refused, even when I offered equity participation. Their response was the same when I suggested they manage the refineries without taking equity. When I pressed for reasons, their CEO cited several issues: their primary profits come from upstream operations, not downstream; our refineries were too small by global standards; maintenance had been poor; and corruption was rampant in refinery operations.”
After Shell’s refusal, Africa’s richest man, Aliko Dangote, proposed a solution. Obasanjo disclosed that Dangote assembled a team and paid $750 million under a public-private partnership (PPP) to operate the refineries. However, this plan was derailed by the succeeding administration, which refunded the money.
“I discussed this with my successor, explaining the arrangement with Dangote. But he told me the NNPC claimed it could manage the refineries. I cautioned him, reminding him of their inefficiency,” Obasanjo said.
The former president contrasted the government’s handling of the refineries with Dangote’s private sector expertise, expressing confidence in Dangote’s ability to make his own refinery successful.
“Since that time, over $2 billion has reportedly been wasted on the refineries, yet they remain non-functional,” Obasanjo lamented. “If Shell refused involvement due to corruption and inefficiency, I believed them. If the refineries were functional, why turn to Dangote now? I am certain his refinery will work and deliver.”
Obasanjo concluded with a Yoruba proverb, illustrating the gap between inflated claims and reality: “They say after harvesting 100 heaps of yams, a farmer will claim he planted 200. You know what that means.”
