▪︎Aliko Dangote with Sen Heineken Lopkobiri. Photo credit: Sen Heineken Lopkobiri’s X.
In Summary
1. Nigeria and Africa can become completely self-sufficient in petroleum products, and saves annual imports bill of $17 billion.
2. Nigeria must develop a refining capacity of 1.5 million barrels per day and prioritise domestic crude supply obligations.
3. He urged the government to incentivise investors in the sector
4. He called for consultation, collaboration, and cooperation among stakeholders.
(IndustrialTimes)
The Chairman of Dangote Refinery and Petrochemicals Company Limited, Aliko Dangote, says that the support of the government and every stakeholders in the oil industry are needed to make Nigeria Africa’s refining powerhouse for petroleum products.
In a keynote address during a summit held in Lagos by the Crude Oil Refinery Owners Association of Nigeria (CORAN), Dangote said: ” Nigeria and Africa can become completely self-sufficient in petroleum products, and we can keep all the value on our shores. We have done it in cement, and we can certainly do it for petroleum products.”
He said that despite producing over 3.4 million barrels of crude oil per day, Africa imports around 3 million barrels of petroleum products daily.
He noted that these imports, primarily from Europe, Russia, and other regions, are estimated to cost approximately $17 billion in 2023.
He urged that Nigeria could capitalise on this situation to become a net exporter of refined petroleum products, as the markets would be more competitively served from Nigeria.
“Both the crude oil and the petroleum products will travel shorter distances.
The logistics costs of floating storage will be eliminated, and countries can purchase their petroleum product requirements just-in-time,” he said.
Represented by Engr. Mansur Ahmed, Group Executive Director of Dangote Industries Ltd, Dangote emphasised that Nigeria must develop a refining capacity of 1.5 million barrels per day and prioritise domestic crude supply obligations to seize this opportunity.
He urged the government to incentivise investors, contrasting this with the Dangote Oil Refinery, which was built without any government incentives.
“It is unfortunate that while countries like Norway are putting oil proceeds into a future fund, in Africa, we are spending oil proceeds from the future. We will also need to prioritise the implementation of domestic crude supply obligations.
“As a vibrant exporter of refined products, Nigeria will witness an improvement in its balance of trade and generate much-needed foreign currency.”
We will need to expand our crude oil production capacity to support demand from new refining capacity. “It is worth noting that the Dangote Refinery already produces sufficient diesel and jet fuel to meet Nigeria’s demand. We recently started the production of PMS and will soon ramp up to meet Nigeria’s needs.
Our refined products have been exported to diverse markets, including Europe, Brazil, the UK, the USA, Singapore, and South Korea,” he added. He lauded the government of President Bola Ahmed Tinubu for taking active steps to achieve this through fast-tracking IOC divestments and other initiatives.
He emphasised that global developments in the petroleum sector, particularly in Europe, will disrupt historical trade flows for refined petroleum products in Africa.
Dangote stated that Nigeria is uniquely positioned to capitalise on this opportunity and become a significant player in the global oil industry.
He called for consultation, collaboration, and cooperation among stakeholders.
“As a vibrant exporter of refined products, Nigeria will witness an improvement in its balance of trade and generate much-needed foreign currency. Nigeria’s potential as a refining hub is clearly not in doubt; let us work together to make it happen,” he urged.
The Chairman of IPPG/Waltersmith Refinery & Petrochemicals Co. Ltd, Abdulrazaq Isa, called on the government to support domestic refiners by ensuring the availability of crude, adhering to domestic crude supply obligations, and implementing effective pricing and monitoring measures to prevent smuggling.
The Chairman of CORAN’s Board of Trustees and CEO of Integrated Oil & Gas, Captain Emmanuel Iheanacho (rtd), remarked that the Dangote Oil Refinery has set a high standard by producing Euro-V products, thus protecting citizens from exposure to high-sulphur products.
He noted that transforming Nigeria into a net exporter will bring numerous benefits but reiterated the need for increased investment to boost crude production, lamenting that Nigeria loses approximately $83 billion annually by not meeting its OPEC quota.