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Nigeria needs 1.5mbpd refining capacity to meet Africa’s demand – Dangote

THE chairman of Dangote Refinery and Petrochemicals Company Limited, Aliko Dangote, says Nigeria must develop a refining capacity of 1.5 million barrels per day and prioritise domestic crude supply obligations to provide petroleum products for African needs.

The billionaire businessman and Africa’s richest man emphasised this at the Crude Oil Refinery Owners Association of Nigeria’s (CORAN) two-day summit that ended on Tuesday, October 8.

He expressed concern that Africa imports around three million barrels of petroleum products daily, despite over 3.4 million barrels of crude oil per day production.

He noted that African countries import primarily from Europe and Russia, among other regions, and that it cost the continent approximately $17 billion to import petroleum products in 2023.

Dangote was represented by his group executive director, Mansur Ahmed, at the summit with the theme, ‘Making Nigeria a net exporter of petroleum products.’

He urged the Nigerian government to incentivise investors, amid the myriad of challenges.

“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. We will need to expand our crude oil production capacity to support demand from new refining capacity,” Dangote said.

He maintained that Nigeria must enhance its crude oil production capacity and effectively manage its crude supply to ensure adequate feedstock for domestic refineries, to transit from a net importer to a net exporter of petroleum products.

He opined that Nigeria could capitalise on the situation to become a net exporter of refined petroleum products, as the markets would be more competitively served by Nigeria.

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“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.

“Nigeria and Africa can become completely self-sufficient, 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,” Dangote stressed.

He called for consultation, collaboration, and cooperation among stakeholders to make it work.

“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.

He also expressed confidence that his 650,000-capacity refinery would transform Nigeria from a net importer to a net exporter of refined petroleum products.

The ICIR reports that the  Dangote Refinery commenced production earlier this year with diesel and jet fuel, and started loading petrol production to marketers in September.

Already the refinery exports products to diverse markets, including Europe, Brazil, the UK, USA, Singapore, and South Korea.

At the CORAN summit, the chairman of IPPG/Waltersmith Refinery & Petrochemicals, Abdulrazaq Isa, urged 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.




     

     

    Also, the chairman of CORAN’s Board of Trustees and chief executive officer of Integrated Oil & Gas, Emmanuel Iheanacho, said Nigeria lost approximately $83 billion annually by not meeting its OPEC quota.

    Iheanacho urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to consider cancelling import licences, as Nigeria could meet its local demand.

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    The chairman of CORAN, Momoh Oyarekhua, expressed concern over challenges related to crude supply, stating that domestic refiners would work with regulators and stakeholders to address these issues.

    On his part, the minister of state for petroleum resources (Oil), Heineken Lopkobiri, assured that the government would continue to refine frameworks to enhance crude production and support domestic refineries.

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