Repair as an economic end state

Repair as an economic end state.

Splitbox Journal • Questions Worth Asking

State refineries are not idle assets waiting for a switch. They are negative-value sinks.

For a decade, the Port Harcourt and Warri facilities have consumed capital without producing a barrel of output. Consensus views this as a failure of execution. This is a mistake.

We are witnessing the Maintenance-Industrial Complex. The institution derives more internal utility from the process of repairing refineries than from the actual output of refined products.

When the act of maintenance becomes the primary source of cash flow for the ecosystem, a restart is no longer the goal. It is the threat.

Investors must stop treating state downstream assets as latent capacity. In any valuation model, these are not assets. They are permanent liabilities that ensure import demand remains high.

Discount every promise of a government restart. The repair is the product.

Explore more founder notes: splitboxltd.com

— Splitbox Journal