Former President Olusegun Obasanjo has revealed how the Nigerian National Petroleum Corporation (NNPC) rejected a $750 million offer from Africa’s richest man, Aliko Dangote, to take over and manage Nigeria’s struggling refineries in 2007.
In an exclusive interview with Channels Television, Obasanjo disclosed that the NNPC, despite its known inability to effectively manage the Port Harcourt, Warri, and Kaduna refineries, turned down the public-private partnership (PPP) proposal during his administration.
“Aliko got a team together and they paid $750m to take part in public–private partnership (PPP) in running the refineries. My successor refunded their money and I went to my successor and told him what transpired. He said NNPC said they wanted the refinery and they could run it and I said but you know they cannot run it,” Obasanjo stated.
He stressed that while companies like Shell declined his offer to manage the refineries with justifiable reasons, the NNPC’s resistance to Dangote’s plan was unjustifiable given its inefficiencies.
“If a company like Shell rejected my offer to manage the refineries based on their reasons, I will believe them,” he said.
Obasanjo criticized the NNPC’s failure to make the refineries work and questioned why the corporation is now partnering with Dangote on his new refinery project.
“Not only will he make it (his refinery) work, he (Dangote) will make it deliver. And whether we announce our own government refineries working or not working, it is like a man who plants 100 heaps of yam and says he planted 200 heaps. After he harvests 100 heaps of yam, he will also harvest 100 heaps of lies.”
NNPC’s Inconsistent Efforts on Refinery Management
The former president highlighted how he sought external help to rehabilitate and manage the facilities during his tenure, but met resistance from major players, including Shell.
“I asked Shell to run the refineries for us and Shell said they wouldn’t. I asked them to take equity but they said no.
“Later on, I called the boss of Shell to come and tell me what the problem was and he gave me four or five reasons. He said, first of all, they make a major profit from upstream, not from downstream. He said they run downstream just to keep their head above water.
“Two, he said our refineries were too small: 60,000 barrels, 100,000 barrels and I think 120,000 barrels. He said that at that time, the average refinery was going for 250,000 barrels.
“Three, he said our refineries were not well maintained. Four, he said that there was too much corruption around the activities of our refinery and they would not want to get involved in that.”
This rejection by Shell paved the way for Dangote to step in with a PPP proposal. However, despite his detailed plan and substantial investment, the NNPC ultimately rejected the offer.
$2 Billion Squandered with No Results
Obasanjo expressed dismay at how much money has been spent on Nigeria’s refineries since Dangote’s offer was turned down, yet with no visible improvement.
“Since that time, more than $2 billion dollars has been squandered on the refinery and they still would not work,” he said.
Recent announcements by the NNPC claim that the Warri Refining & Petrochemicals Company (WRPC) and the Port Harcourt refinery have commenced operations. However, skepticism remains as past promises of functionality have not materialized.
The revelations highlight the decades-long challenges plaguing Nigeria’s oil sector, with missed opportunities, corruption, and mismanagement contributing to the current state of the country’s refineries. As Dangote’s privately owned refinery nears full operations, it remains a question of whether the nation’s public refineries can ever meet their full potential.
