Mr. President, How Much Money And Time Do You Want To Spend On 4 Dead Refineries?

By Dan D. Kunle

Your Excellency, President Bola Ahmed Tinubu, GCFR, Good Afternoon, sir.

I write this fourth open letter with a simple appeal to your conscience, following your recent statements on the rehabilitation of the stranded 4 dead refineries.

Nigeria does not only suffer from shortage of new industrial investment. We also possess an enormous stock of industrial capital already built, already paid for, repeatedly maintained and repeatedly rehabilitated — yet still not producing what it was designed to produce.

Before committing another billion dollars to another rehabilitation programme, I respectfully ask your administration to reflect more deeply on what went wrong, why these assets became stranded, how much Nigeria has already committed to them, and whether repeating the same model is commercially rational.

The most obvious place to begin is with the four government-owned refinery units.

The Four Dead Refineries

Nigeria’s state-owned refineries have a combined installed capacity of approximately 445,000 barrels per day: Port Harcourt Old — 65,000 bpd; Port Harcourt New — 150,000 bpd; Warri — 125,000 bpd; and Kaduna — 110,000 bpd.

Yet for many years Nigeria imported the overwhelming majority of the petroleum products consumed domestically. The financial history therefore deserves serious attention.

In 2021, the Federal Executive Council approved approximately $1.5 billion for rehabilitation of Port Harcourt. The same year, another approximately $1.484 billion was approved for Warri and Kaduna — about $897.7 million for Warri and $586.9 million for Kaduna.

Almost $3bn Of Major Refinery Rehabilitation Approvals In 2021 Alone

NNPC separately reported approximately N100 billion in refinery rehabilitation expenditure during 2021. But the recent spending is only part of the story.

A House of Representatives record, based on information submitted by NNPC, stated that between 2010 and 2020 the three refinery companies incurred approximately N4.8 trillion in operating and running costs, with accumulated losses of approximately N366.5 billion. It also recorded about N42.65 billion of rehabilitation projects between 2013 and 2019.

A separate House motion in 2023 cited a much larger cumulative figure of N11.35 trillion allocated to refinery renovation from 2010 onward. That figure should be independently reconciled before being treated as audited expenditure — which is precisely why a proper forensic accounting is overdue.

NNPC’s 2024 annual report further states that Project Yield, a seven-year financing arrangement ultimately used for the Port Harcourt refinery EPC rehabilitation contract, had drawn approximately N1.4 trillion by 31 December 2024.

This is no longer a maintenance issue. It is a national capital-allocation question — and an opportunity-cost question.

Mr. President, may I respectively ask, if you have ever stood inside the control room of one of our old refineries?

It looks less like the control centre of a modern refinery and more like the set of a 1960s James Bond movie — enormous switches, rows of buttons, analogue instruments and ageing screens. Much of this technology belongs to the world in which you were an 18-year-old young man. The only thing missing is the Bond villain sitting in the corner, but we all know the villains (various NNPC Managers) are not far away.

Yet we continue discussing billions for rehabilitation, as though enough money can somehow turn yesterday’s industrial architecture into tomorrow’s competitive refinery.

Mr. President, At Some Point Rehabilitation Becomes Restoration Of A Museum

Nigeria does not need four expensive industrial monuments. It needs refineries that can compete in 2026 and beyond.

Before spending another billion, perhaps we should finally ask the uncomfortable question:

Are we repairing these refineries — Or refusing to admit that their time has failed?  Also, are the new Chinese partners ready to make it work, or are they just after the location for their own private businesses?

NNPC and the Midstream And Downstream System

The refinery story cannot be separated from NNPC’s wider infrastructure. Refineries require crude pipelines. Their products require evacuation pipelines. Those pipelines require depots and terminals.

Today, the crude-supply route from the Niger Delta through Warri toward Kaduna has for years faced severe vandalism, integrity and operability problems. A refinery cannot operate sustainably if the system that feeds and evacuates it is itself unreliable.

For decades, much of this infrastructure sat under NNPC subsidiaries including the former Petroleum Products Marketing Company (PPMC) and the Nigerian Pipelines and Storage Company (NPSC).

In 2021, NNPC opened a programme to rehabilitate critical crude and product pipelines, depots and terminals linked to Port Harcourt, Warri, Kaduna and System 2B. NNPC described the programme as necessary to support the refineries when they returned to operation. The public deserves a clear account of what was contracted, what has been completed, what is operational and what value has been delivered.

NNPC reported approximately N49.69 billion spent on pipeline repairs and management in only the first ten months of 2020. In June 2022 alone, pipeline repair, security and maintenance costs were reported at approximately N8.35 billion.

So when we discuss stranded refineries, we should not stop at the refinery fence. Nigeria has also spent heavily on the pipeline, depot and terminal system required to feed and evacuate them.

This Is A Stranded System — Not Merely Four Stranded Refineries

Respectfully and humbly submitted for your final reconsideration — and, I hope, your final directive to NNPC will be to transfer the Refineries to BPE (Bureau Private Entreprises)

Other Stranded National Assets

Mr. President, the same deeper reflection should extend beyond refining. A few examples illustrate the wider pattern.

Ajaokuta Steel Company

Ajaokuta was intended to anchor Nigeria’s industrialisation, with about 1.3 million tonnes per year of steel capacity, rolling mills, engineering workshops and captive power. More than four decades later, it still does not produce integrated steel commercially.

Billions have already been committed. In 2018, the House of Representatives estimated that another $2 billion would be required to revive Ajaokuta, Itakpe and associated infrastructure. The current administration has discussed another N35 billion merely to restart the Light Steel Mill.

Meanwhile, Nigeria continues importing more than $4 billion of steel products annually.

We Built The Steel Complex, Keep Spending To Revive It — And Still Import The Steel

NIOMCO – Itakpe, Kogi State

NIOMCO was built to mine and process the iron ore required by Ajaokuta and Nigeria’s wider steel industry. When Ajaokuta remains stranded, Itakpe becomes stranded with it. The result is an underutilised chain of mine, rail, steelmaking and downstream industry.

Mr. President, I therefore read with particular interest the new arrangements linking NIOMCO/Itakpe ore resources to Premium Steel & Mines Limited, the present operator of the former Delta Steel Company, as part of its proposed revival programme.

I genuinely hope it succeeds. But Nigeria has been here before: Delta Steel, NIOMCO and Ajaokuta have passed through privatisations, concessions, creditor interventions, reversals, litigation and arbitration. AMCON, Premium Steel, BPE and earlier concession interests form part of that history.

I trust that comprehensive legal, technical, financial and title due diligence has been completed. Nigerians should be shown the principal conclusions: what exactly has been granted, for how long, what ore volumes are committed, what remains available to Ajaokuta, and whether all historic claims have been conclusively resolved.

We Should Not Solve One Stranded Asset By Creating The Legal Problem Of The Next One

ALSCON – Ikot Abasi, Akwa Ibom

ALSCON was built to produce approximately 193,000 tonnes of aluminium annually, supported by its own power and port infrastructure. Today, it remains stranded, while navigational access to the plant is itself part of the infrastructure challenge.

Mr. President, you personally called for its revival in 2024, while RUSAL proposed another $500 million investment. But before another dollar goes in, Nigeria deserves an answer to a simple question:

Who Actually Owns ALSCON?

RUSAL claims 85% ownership. BFIG continues to assert rights arising from the original privatisation and subsequent Supreme Court litigation. After more than two decades of dispute, Nigeria should not enter another major rehabilitation cycle while ownership and enforceable rights remain contested.

Mr. President, resolve the title first. Then revive the smelter. Otherwise, another $500 million investment risks becoming tomorrow’s litigation and arbitration.

NIPP Power Assets

Nigeria invested heavily in gas-fired NIPP power plants and associated transmission infrastructure. Yet significant installed capacity has repeatedly remained unavailable because of gas shortages, transmission constraints, maintenance and commercial problems.

A turbine without gas is stranded. A power station that cannot evacuate electricity is stranded. The recurring problem is that Nigeria often builds the physical asset without completing the commercial system required to make it productive.

Mambilla Hydropower Project

Mambilla has been discussed since the 1970s. In 2017, government approved a $5.79 billion contract for a 3,050MW hydroelectric project. Nearly a decade later, the project remains unrealised.

Phase 1 of the Mambilla was awarded by Obasanjo in 2007, but was cancelled by president Umar Musa Yar’Adua ,and idle ever since

Years of studies, consultancy, planning, negotiations and government effort have still produced little electricity.

Money Committed. Time Lost. Power Not Delivered

The Scale Of The Question

Mr. President, these are not isolated accidents. They reveal a pattern in how Nigeria conceives, owns, finances, rehabilitates and operates major public industrial assets. At the core of this is, huge sum of money, politics, policies, and project execution and management. Simply too many fingers in the jar.. and it did not end well.

We have 445,000 bpd of government refining capacity that has consumed billions in rehabilitation and operating expenditure; a steel complex into which billions have been committed while Nigeria imports billions of dollars of steel; an iron-ore system unable to fulfil its original industrial purpose; a 193,000-tonne aluminium smelter largely idle; billions spent preserving pipelines, depots and terminals; major power assets operating below potential; and a multi-billion-dollar hydro project discussed for decades without delivering power.

My Honest Appeal

Mr. President, I am personally pleading to your conscience: before approving another major rehabilitation commitment and jump into an abyss. Please, ask not only what it will cost to repair the asset, but what Nigeria has already spent, what that money produced, why the previous investment failed, and why the next billion should produce a different result. Mr. President, as an ordinary citizen I would like to think, that history taught us, that doing the same thing repeatedly and expecting a different result, rarely changes the outcome.

Past Expenditures Must Not Become The Justification For More  Future Expenditures

Nigeria needs the courage to distinguish between an asset worth saving and an institution we are simply afraid to close. Some assets should be rehabilitated. Some should be sold or concessioned. Some should be repurposed. Some require complete replacement. And some should be allowed to die. 

Stop Spending Public Money To Preserve Industrial Failures Without First Proving The Commercial Cases

Mr. President, Nigeria does not only need new investment. We first need an honest accounting of the billions already invested. Only then can we rationally decide what deserves another round of investment by government. Allow private sector to lead and drive the industrialization of Nigeria please Sir. The FGON should focus on the effective performance of public service, and most of all Infrastructure. Without infrastructure there is no way we can bring this country out of her current status.

Respectfully submitted

*Dan D. Kunle writes from Abuja