Faisal Usman Fagge

ABUJA, NIGERIA — At the recently concluded Nigeria International Energy Summit (NIES 2026), energy veteran Bayo Ojulari “unveiled” the structural flaw that led to the collapse of Nigeria’s state-owned refineries. According to Ojulari, the failure was not just technical but a result of a “system designed for taking,” which prioritized lucrative construction contracts over the actual work of running the plants.

The “90/10” Distortion: Finance vs. Operations

Ojulari’s analysis highlights a massive imbalance in how Nigeria manages its critical infrastructure. Historically, refinery projects focused almost exclusively on the “EPC” (Engineering, Procurement, and Construction) phase.

The EPC Trap: Contractors get paid to build (EPC) or finance (Financing) and then “move on.” These entities have no “skin in the game” regarding the plant’s long-term performance.
The Operating Vacuum: While a refinery takes 3-5 years to build, it must be operated for 25-50 years. Nigeria focused on the 5-year build and neglected the 50-year operation.
The O&M Layer: Ojulari warned that even “Operations and Maintenance” (O&M) became just another layer of contracting—taking money out of the system rather than building local capacity to manage the assets.

The Solution: “Operational Assurance” from Day One

Drawing from his experience at Shell and QatarGas, Ojulari introduced a data-driven principle for future projects: Operational Readiness.

Early Audits: Operational experts should audit projects when construction is only at 90% completion—not after it’s finished.
Embedded Thinking: An “Operational Assurance” person must be appointed the same day the project starts.
Capacity Building: Shifting from “hiring contractors to run plants” to “training NNPC staff to own the systems.”

The New Direction: Chinese Partnerships

Ojulari disclosed that NNPC is now reversing this failed approach. The company is currently exploring a partnership with a Chinese firm for one of the state-owned refineries, focusing on a sustainable operating model rather than just a repair contract.