THE President/Chief Executive Officer, Dangote Group, Aliko Dangote, has said that the $20bn Dangote refinery in Lekki, Lagos would start with the refining of 350,000 barrels per day of crude oil.
Dangote, who disclosed this during a special interview with the Financial Times, also stated that the refinery would receive about six million barrels of crude in December 2023.
“We’re starting with 350,000 barrels a day, “Dangote told the Financial Times, adding that a deal had already been clinched for the “first cargo of about 6mn barrels” for delivery next month.
Dangote said he believed the refinery could reach its capacity of 650,000 barrels a day by the end of 2024, although the IMF has said it doubts it will reach more than a third of that by 2025.
At full tilt, the refinery, the world’s largest “single train” facility with just one distillation unit, could save Nigeria billions in foreign exchange currently spent on imported fuel.
It was “shameful”, Dangote said, that Nigeria, a major oil producer for more than 50 years, could not refine its own crude in anything like sufficient quantity.
Dangote conceded there were times when he thought the massive project – long delayed and about $8bn over budget – might jeopardise his business empire.
“The challenges that we faced, I don’t know whether other people can face these challenges and even survive,” he said. “It’s either we sink or we sail through. And we thank the Almighty that at least we’ve arrived at the destination.”
Yet in what is supposed to be Dangote’s moment of triumph, he finds himself under intense pressure. A rival industrialist has accused him of underhand business practices and of gaining unfair access to foreign exchange from a central bank whose former governor is now being investigated by the authorities. Dangote has denied both allegations.
In addition, the Nigerian National Petroleum Corporation has been unable or unwilling to supply him with the crude his refinery needs, although Dangote insists it is only a matter of weeks before oil starts flowing.
A few even doubt the refinery will work at all, or predict that it will be inefficient. Rumours are also rife that Dangote, whom critics accuse of having unduly benefited from close relations with four successive administrations, has fallen out with Bola Tinubu, who became president in May.
In the very revealing interview, Dangote complained that rivals were complaining because they did not understand what it took to run a business that was the country’s biggest private-sector employer and its biggest taxpayer. “Sometimes when people talk about us, it’s like the government is holding everybody down and allowing us alone to fly.”
He did not want to discuss in detail a tussle over the supply of crude with NNPC, which owns 20 per cent of the refinery after a $2.76bn equity purchase in 2021. Nigeria produces about 1.4 million barrels of oil a day, well short of its OPEC quota of 1.8 million barrels, with much pre-sold in forward contracts.
“Let’s not have the blame game here,” he said of NNPC’s reported difficulties in meeting the refinery’s requirements. “We have resolved all the issues of supply.”
Dangote rejected suggestions that NNPC was playing hardball to negotiate a bigger share of the refinery, which he said would generate revenue of $25bn a year at full capacity. “I don’t think NNPC needs to buy more shares. I think they’re OK with what we’ve given them.”
The refinery would eventually be floated as a separate company, he said, initially on the Lagos stock exchange.