The long-awaited Dangote Refinery, a $20 billion project located in Lekki, Lagos, is finally set to begin operations. According to Aliko Dangote, the President/Chief Executive Officer of the Dangote Group, the refinery will initially refine 350,000 barrels of crude oil per day. In an interview with the Financial Times, Dangote announced that the refinery has already secured a deal for the first cargo of about 6 million barrels, which is expected to be delivered in December 2023.
Dangote expressed confidence that the refinery could reach its full capacity of 650,000 barrels per day by the end of 2024. However, the International Monetary Fund (IMF) has expressed doubts about the refinery’s ability to reach more than a third of that capacity by 2025.
The Dangote Refinery, touted as the world’s largest “single train” facility with a single distillation unit, has the potential to save Nigeria billions in foreign exchange currently spent on imported fuel. Dangote criticized the fact that Nigeria, a major oil producer for over five decades, has been unable to refine its own crude in sufficient quantities.
Despite its imminent start, the Dangote Refinery has faced numerous challenges throughout its development. The project has been long delayed and approximately $8 billion over budget. Dangote acknowledged that there were times when he thought the massive undertaking could jeopardize his business empire. However, he expressed gratitude for eventually reaching this milestone.
Notwithstanding the refinery’s progress, Dangote finds himself under intense pressure. He has been accused of underhanded business practices and unfair access to foreign exchange by a rival industrialist. Additionally, the Nigerian National Petroleum Corporation (NNPC) has been unable or unwilling to supply the refinery with the required crude oil. Nevertheless, Dangote remains confident that it will only be a matter of weeks before oil starts flowing.
Speculations and doubts surrounding the refinery’s efficiency persist, with some questioning its viability. There have also been rumors of a falling out between Dangote and President Bola Tinubu. However, Dangote stated that such criticisms result from a lack of understanding regarding the complexities of running the country’s largest private-sector employer and taxpayer.
Regarding the supply of crude oil from NNPC, Dangote chose not to engage in blame games, emphasizing that all supply issues have been resolved. He dismissed suggestions that NNPC was playing hardball to negotiate a larger share of the refinery, which is projected to generate annual revenue of $25 billion at full capacity. Dangote affirmed that NNPC is content with the shares allocated to them.
Ultimately, Dangote plans to float the refinery as a separate company, initially on the Lagos stock exchange. The commencement of operations at the Dangote Refinery brings hope for Nigeria’s refining capabilities and the potential for reducing dependence on imported fuel.