InfoStride News reported that Aliko Dangote, the President/Chief Executive Officer of the Dangote Group, announced plans for the $20 billion Dangote refinery in Lekki, Lagos. According to Dangote, the refinery is set to commence operations with the refining of 350,000 barrels per day of crude oil. In an interview with the Financial Times, he revealed that the refinery is expected to receive approximately six million barrels of crude in December 2023.
“We’re starting with 350,000 barrels a day,” Dangote stated, mentioning that a deal had already been secured for the “first cargo of about 6mn barrels” scheduled for delivery next month. Despite challenges and delays that pushed the project approximately $8 billion over budget, Dangote expressed confidence that the refinery could achieve its full capacity of 650,000 barrels a day by the end of 2024. However, the International Monetary Fund (IMF) has expressed skepticism, doubting it will reach more than a third of that capacity by 2025.
The Dangote refinery, touted as the world’s largest “single train” facility with just one distillation unit, holds the potential to significantly reduce Nigeria’s foreign exchange expenditure on imported fuel when operating at full capacity. Dangote criticized the fact that Nigeria, a major oil producer for over 50 years, has been unable to refine its own crude in sufficient quantity, deeming it “shameful.”
Despite reaching a pivotal moment in the project’s development, Dangote faces challenges. A rival industrialist has accused him of underhand business practices and gaining unfair access to foreign exchange from a central bank under investigation. Dangote vehemently denied these allegations. Additionally, the Nigerian National Petroleum Corporation (NNPC) has faced difficulties in supplying the required crude to the refinery. Dangote, however, remains optimistic that oil supply will commence in a matter of weeks.
There are doubts about the refinery’s efficiency, with some speculating it may not work at all. Rumors circulate about Dangote’s strained relationship with President Bola Tinubu. In the interview, Dangote expressed frustration with rivals who, he claimed, lacked an understanding of the challenges faced in running the country’s biggest private-sector employer and largest taxpayer.
Regarding the tussle with NNPC over crude supply, Dangote refrained from assigning blame, stating, “Let’s not have the blame game here. We have resolved all the issues of supply.” He rejected suggestions that NNPC was playing hardball to negotiate a larger share of the refinery, asserting that they are content with the shares allocated following a $2.76 billion equity purchase in 2021. Dangote revealed plans to eventually float the refinery as a separate company, initially on the Lagos stock exchange, with an anticipated annual revenue of $25 billion at full capacity.
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