How NNPC Rejected Dangote’s $750 Million Offer to Manage Nigeria’s Refineries, Obasanjo Reveals

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In a recent interview with Channels Television, former President Olusegun Obasanjo revealed that the Nigerian National Petroleum Corporation (NNPC), now Nigerian National Petroleum Company Limited (NNPC Limited) rejected a $750 million offer from Aliko Dangote to manage the Port Harcourt and Kaduna refineries in 2007. This revelation has reignited discussions on the management and efficiency of Nigeria’s critical energy infrastructure.

Obasanjo explained that Dangote, Africa’s richest man, had proposed a Public-Private Partnership (PPP) to revitalize the struggling refineries. Despite NNPC’s acknowledgment of its own limitations in effectively operating the refineries, the offer was declined, and Dangote’s payment was refunded.

“My successor refunded their money, and I went to him to explain what had transpired. They wanted the refineries, and they could run them. I said, ‘But you know they cannot run it,'” Obasanjo recounted.

Since the rejection of Dangote’s offer, the Nigerian government has spent over $2 billion on the refineries without achieving significant improvements.

The Port Harcourt and Kaduna refineries have been plagued by inefficiencies, frequent shutdowns, and underutilization, leading to a heavy reliance on imported refined petroleum products.

Industry Reactions and Expert Opinions on Refineries

Industry experts have criticized the decision to reject Dangote’s offer, citing the potential benefits of a PPP in improving refinery operations and reducing import dependency. According to a report by the Nigerian Extractive Industries Transparency Initiative (NEITI), Nigeria’s refineries operated at an average capacity utilization of less than 20% between 2015 and 2020.

“Allowing private sector participation in the management of the refineries could have brought in much-needed expertise and investment,” said Dr. Maikanti Baru, former Group Managing Director of NNPC. “The decision to reject Dangote’s offer was a missed opportunity for the country.”

Dangote’s Continued Investment in Nigeria’s Energy Sector

Despite the setback, Dangote has continued to invest in Nigeria’s energy sector. The Dangote Refinery, which recently began operations in Lagos, is one of the largest single-train refineries in the world, with a capacity to process 650,000 barrels of crude oil per day.

The current NNPC management has been accused of making frantic efforts to frustrate the take off of the Dangote Refinery, leading to public outcry.

The Nigerian government has recently shown renewed interest in the revitalization of the country’s refineries. In 2021, the Federal Executive Council approved the rehabilitation of the Port Harcourt refinery through a $1.5 billion contract awarded to an Italian engineering firm, Tecnimont. The project aimed to restore the refinery to at least 90% of its nameplate capacity. Later in 2024, the refinery began operation but the public had continued to doubt the announcement by the NNPC Limited even as the government owned commercial company in December announced that the Warri Refinery has began operations.

However, the revelation by former President Obasanjo has sparked a broader conversation about the management of Nigeria’s energy infrastructure and the role of private sector participation.

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