•NNPC boss, Bayo Ojulari
The Chief Executive Officer (CEO), Nigerian National Petroleum Company (NNPC) Limited , Bayo Ojulari says the company is in talks with a Chinese firm over a potential partnership involving one of Nigeria’s state-owned refineries.
Ojulari spoke during the just-concluded Nigerian International Energy Summit (NIES), where he attributed the long-standing failure of Nigeria’s refineries to an overemphasis on financing and engineering, procurement and construction (EPC) contracts, with little attention paid to long-term operations, reports Saturday Guardian.
“The reason our refineries have not worked is that we are focused on the first two: EPC and financing. Anybody who wants to do the financing will get value for it,” he said.
“The person financing is not financing you for free. They are financing you for margins and profitability. The EPC contractors do their work, get paid and move on. You, as NNPC, are left for the next 20 to 40 years to run those refineries, and we’ve never really focused on that.”
Ojulari said there had been extensive discussions around operations and maintenance (O&M), but noted that globally, effective O&M requires a strong operational excellence team to oversee refinery performance.
“Without that, resources are often wasted. Then again, O&M is another contract. So you end up with financing, EPC and O&M all taking money from the system without any skin in the game,” he said.
“There’s no way you can sustain any business like that. The system was designed for taking, not for putting anything in.”
According to him, the current NNPC leadership has resolved to focus on the missing link — operational readiness and assurance — as part of its refinery reform strategy.
“For those of us who have spent years building multi-billion-dollar facilities for international oil companies, we understand these principles. The day you start a project, you appoint an operational assurance person who stays with the project from the beginning to ensure whatever is delivered can be operated,” Ojulari explained.
Drawing from his experience at Shell, Ojulari said he served on the commissioning team for the Qatargas project, where operational readiness was embedded from the early stages.
“During the project phase, I was part of the operations readiness team. Long before construction began, we audited operational readiness. The second audit was done when construction was about 90 per cent completed,” he said.
He noted that issues identified during those audits helped explain potential operability challenges and guided the deployment of training, capacity building and resources required to operate the facilities efficiently.
“For most mega-projects, you spend two to three years thinking about the project, framing it, if you are very efficient. You must put in the capability, training and resources needed to operate from day one,” Ojulari added.
