Former President Olusegun Obasanjo has reiterated his position that government-owned refineries will never work again, maintaining a stance he has held since his tenure in office. Speaking on a recent programme, Obasanjo disclosed how he unsuccessfully tried to convince Shell to take over the management of the refineries, revealing the reasons the oil major gave for declining the offer.
Obasanjo recounted that during his presidency, he approached Shell with a proposal to take 10 per cent equity and run the refineries. When the company declined, he asked them to simply manage the facilities without taking equity. Shell refused both offers. A top Shell official explained that the company made most of its profits in the upstream sector, not the downstream, and that the refineries were too small, with capacities of 60,000 and 100,000 barrels per day at a time when viable refineries were in the range of 250,000 to 300,000 barrels. The official also stated that the refineries were not well-maintained, with quacks and amateurs handling repairs.
The former president argued that the solution lies in private sector management, pointing to the success of the Nigeria Liquefied Natural Gas company, where the private sector holds 51 per cent equity and the government holds 49 per cent. He cited the NLNG as a model that has not been destroyed by government interference. Obasanjo’s comments stand in contrast to previous official statements. When Tinubu expressed optimism about the refineries working by December 2023, a presidential aide had dismissed Obasanjo’s skepticism, noting that he was not an engineer.
Nearly three years later, the refineries remain non-operational, despite repeated government assurances and the awarding of rehabilitation contracts. The Port Harcourt refinery has missed multiple restart deadlines, while the Warri and Kaduna refineries have remained largely dormant. The persistence of Obasanjo’s prediction raises fundamental questions about the feasibility of reviving state-owned refineries and whether public-private partnerships represent a more viable path to restoring domestic refining capacity.
