A Small Nigerian Refinery Has Been About to Start Making Petrol Since 2024

Nigeria · Energy

A three-thousand-barrel unit, finished two years ago, that keeps not starting.

Aradel petrol production at the Ogbele refinery in Rivers State is now expected in 2027, the company’s refinery chief told a conference in Abuja. That would be welcome news if it were the first time the date had been given. It is at least the third.

What the Aradel petrol production plan actually says

Temitayo Ogunbanjo, general manager of refinery at Aradel Holdings Plc, told an Abuja conference on 13 August that the company expects to start producing premium motor spirit — petrol — at Ogbele in 2027. He tied the decision to Nigeria’s 2023 removal of fuel subsidies, which he said created a pathway to gasoline production that did not exist under price controls.

The unit involved is a dedicated petrol train of roughly 3,000 barrels a day. Ogbele’s installed capacity is 11,000 barrels a day, producing kerosene, diesel, gas oil and naphtha. With the petrol train running, planned total capacity is around 14,000 barrels a day.

Aradel says Ogbele was Nigeria’s first modular refinery, starting at 1,000 barrels a day in 2010 and growing to its present size. It sits inside an integrated oil and gas site, which is the company’s advantage here: the crude does not have to be trucked or shipped in.

The part the announcement leaves out

This train is not new. A stockbroker’s initiation note in October 2024 described the roughly 3,000-barrel PMS train as already mechanically complete and due to be commissioned soon, with output expected in 2025.

In May 2025, Aradel’s managing director Gbite Falade said publicly that the petrol plant would come on stream in May 2026.

May 2026 came and went. The date is now 2027. A unit that has been physically built for close to two years and has slipped twice is a different story from a company announcing a new investment, and it is the story worth telling.

None of that means it will not happen. Modular refineries stall on things that do not make headlines — feedstock contracts, product specification, offtake, a single missing approval. But readers deserve the timeline rather than only the latest date on it.

What it costs, and who is paying

The company has not broken out a figure for the petrol train alone, but the wider project is not unfunded. In August 2025 the International Finance Corporation put together a US$50 million package — a US$35 million loan of its own plus US$15 million mobilised from other lenders — toward a roughly US$140 million expansion at Ogbele that includes hydrotreatment, the step that gets fuels to specification.

Utilisation is the other number to hold onto. Ogbele ran at about 42% of capacity in 2023. Adding a train to a plant that is not filling the trains it has is a decision about product mix, not about volume.

Hydrotreatment is the quiet part of that package and the part that matters most for petrol. Making a fuel that meets specification is a different engineering problem from separating crude into rough cuts, and it is where small refineries most often stall. A lender putting money behind that step is a better signal about the project than any date.

How much this matters to Aradel

Less than the coverage suggests. Aradel published first-half results on 1 August: revenue of ₦2.49 trillion, about US$1.85 billion at 1,345 naira to the dollar, up from ₦368 billion a year earlier. Pre-tax profit was ₦753 billion, roughly US$560 million, and profit after tax ₦191 billion, about US$142 million — the gap largely explained by ₦326 billion, some US$242 million, of finance costs.

Refined petroleum products contributed ₦129 billion of that revenue, about US$96 million. That is roughly 5% of the total. Aradel is an oil producer that owns a refinery, not a refiner, and its half-year jump came from oil output rising more than fivefold to 139,500 barrels of oil equivalent a day.

Aradel listed on the Nigerian Exchange main board by introduction in October 2024, having previously traded as Niger Delta Exploration and Production.

Why this matters if you follow African energy

Nigeria’s fuel balance has swung violently this year, and small refineries are part of why. Petrol imports fell about 96% year on year in the first quarter, and for the first time in its history the country became a net petrol exporter in March and April. By May it was importing again, while the Dangote refinery took a unit down for maintenance, and imports had tripled by July.

That volatility is the argument for modular plants. They are small enough to build in a year or so and close enough to demand to matter locally, which is the logic behind projects such as Waltersmith’s 5,000-barrel refinery at Ibigwe, where a federal content board put in US$10 million of equity.

It is also the argument against reading too much into any single one of them. Ogbele at 14,000 barrels a day sits beside a Dangote plant whose nameplate was raised to 700,000 barrels a day in June, with a stated ambition of 1.4 million within thirty months. The two are not competitors. They are different answers to the same question about who refines Nigeria’s crude.

Frequently Asked Questions

Sources: Business Post — Aradel targets 2027 for petrol production at its modular refinery; Africa Oil+Gas Report, May 2025 — Aradel’s PMS plant ‘will come on stream in May 2026’; CardinalStone, October 2024 — Aradel Holdings initiation of coverage, train configuration and utilisation; IFC backs Aradel’s refinery expansion with a US$50 million package, August 2025; ThisDay — Aradel’s oil output surges 523% to 139.5 kboepd in the first half

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