Daud Olatunji
Africa’s wealthiest man, Aliko Dangote, has expressed his willingness to sell his multibillion-dollar oil refinery to the state-owned energy company, NNPC Limited.
PLATFORM TIMES reports that the announcement comes amidst escalating tensions with key equity partners and regulatory authorities in Nigeria.
The 650,000 barrel-per-day Dangote Refinery, which became operational last year after a decade of construction, cost a staggering $19 billion—more than double the initial estimate.
PLATFORM TIMES gathered that it was projected to significantly reduce Nigeria’s dependence on imported fuel and save up to 30 percent of the total foreign exchange spent on importing goods.
However, the refinery has been mired in controversy and operational challenges since its inception.
“Let them (NNPCL) buy me out and run the refinery the best way they can. They have labelled me a monopolist. That’s an incorrect and unfair allegation, but it’s OK. If they buy me out, at least, their so-called monopolist would be out of the way,” Mr. Dangote told PREMIUM TIMES in an exclusive interview on Sunday.
The refinery, poised to roll out its first batch of petrol to the Nigerian market in August, has been operating just above half its capacity since January.
It was further gathered that this suboptimal performance is largely due to difficulties in sourcing crude from international producers.
According to Dangote Refinery, potential suppliers are either demanding exorbitant premiums or claiming the product is unavailable.
NNPC, once a strong ally of the refinery, has delivered only 6.9 million barrels of oil to the plant as of May since last year.
This shortfall has forced the refinery to turn to countries like Brazil and the United States to bridge the supply gap.
Despite an existing supply deal and a commitment to 20 percent equity participation, NNPC Limited has only paid for 7.2 percent of the agreed stake.
“As you probably know, I am 67 years old, in less than three years, I will be 70. I need very little to live the rest of my life. I can’t take the refinery or any other property or asset to my grave. Everything I do is in the interest of my country,” Mr. Dangote said.
The challenges facing Dangote’s refinery are compounded by regulatory disputes. Last month, Devakumar Edwin, Vice President of Oil and Gas at the Dangote Group, accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of allowing the importation of substandard fuel into the country.
This allegation was met with a sharp rebuttal from Farouk Ahmed, Chief Executive of NMDPRA, who criticised the high sulphur content in the fuel produced by Dangote Refinery and other local refineries.
“The AGO quality in terms of sulphur is the lowest as far as West Africa’s requirement of 50 parts per million (ppm).
“Dangote refinery, as well as some major refineries like Waltersmith refinery, produce between 650 ppm to 1,200 ppm. So, in terms of quality, their quality is much more inferior to the imported quality,” Ahmed stated.
He said however, the ongoing disputes and operational hurdles have cast a shadow over these ambitions.
Reflecting on the situation, Dangote shared, “Four years ago, one of my very wealthy friends began to invest his money abroad. I disagreed with him and urged him to rethink his action in the interest of his country.
He blamed his action on policy inconsistencies and shenanigans of interest groups.
That friend has been taunting me in the past few days, saying he warned me and that he has been proven right.”
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