Former President Olusegun Obasanjo has revealed that Shell refused to invest in Nigerian refineries due to concerns about corruption and poor maintenance. He discussed his previous efforts to improve Nigeria’s refining sector during an interview with the Financial Times, shedding light on the challenges faced by the country’s oil industry.
Obasanjo criticized the management of state-owned refineries, highlighting the reasons Shell declined his invitation to take equity participation and run the facilities. “When I was President, I invited Shell and asked them to take equity participation and run our refineries. They refused, citing poor maintenance and corruption,” he said. He further elaborated, “They said there’s too much corruption with the way our refinery is run and maintained. They didn’t want to get involved in such a mess.”
Obasanjo expressed skepticism about repeated promises to rehabilitate state-owned refineries, questioning their credibility. “How many times have they told us that? And at what price?” he asked. He criticized the lack of progress, stating, “Those problems, as far as the government refineries are concerned, have never gone. They have even increased.”
Nigerian state-owned refineries have long struggled with missed deadlines and inefficiencies. On March 15, Mele Kyari, the group chief executive officer of the Nigerian National Petroleum Company (NNPC), promised that some refineries would start production by the end of March. However, this deadline was not met. Kyari has now set a new timeline, stating, “Specific to NNPC refineries, it is impossible to have the Kaduna refinery come to operation before December. However, the Port Harcourt refinery is expected to commence production in early August this year.”
Obasanjo also raised concerns about potential sabotage of the Dangote Petroleum Refinery. He suggested that those benefiting from Nigeria’s fuel importation industry might try to undermine its success. “Aliko’s investment in a refinery, if it goes well, should encourage both Nigerians and non-Nigerians to invest in Nigeria,” he said. “If those who are selling or supplying refined products for Nigeria feel that they will lose the lucrative opportunity, they will also make every effort to get him frustrated.”
He addressed worries that international oil companies (IOCs) could be deliberately obstructing the refinery’s efforts. The Dangote refinery, owned by Aliko Dangote, has been at the center of controversy, involving disputes between the refinery, IOCs, and the Nigerian National Petroleum Company (NNPC).
Devakumar Edwin, Vice President of Dangote Industries, has previously raised concerns about international oil companies selling crude at inflated prices, complicating the refinery’s procurement efforts. Meanwhile, Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, has accused Dangote of exhibiting monopolistic behavior, a claim disputed by the Dangote Group.
In a bid to resolve these disputes, President Bola Ahmed Tinubu directed the Nigerian National Petroleum Company Limited to supply crude oil to local refineries, including Dangote’s, in Nigerian Naira. This decision aims to ensure a stable supply of crude to local refineries, supporting their operations and reducing reliance on imported refined products.
