23 March 2015, Lagos – Africa’s richest man and President, Dangote Group, Alhaji Aliko Dangote, has said his oil refinery will process 650,000 barrels of crude oil per day.
The completion of the plant, expected to come on stream in 2017, will see Nigeria having one of the largest petroleum refineries in the world.
Dangote, in a statement on Sunday, said though the initial plan was to have 450,000bpd refining capacity, he had since gone back to the drawing board to enlarge the plant.
He said Nigeria as a leading producer of crude oil should also be credited with similar local refining capacity.
According to him, the present situation where the country produces crude oil but goes abroad to buy refined products is unacceptable.
Dangote, who spoke through his Group Executive Director, Mr. Devakumar Edwin, said the conglomerate was ready to reverse the trend just as it had successfully done in other sectors, including sugar and cement.
His clarification came even as the company’s Executive Director, Stakeholders Management and Corporate Communications, Mr. Mansur Ahmed, said in South Africa that the refinery would run full swing by 2017.
Edwin, while receiving on behalf of Dangote a group of oil and gas stakeholders in Lagos, said the capacity of the petrochemical plant, being developed alongside the refinery, had been increased from 750,000 to 3.6 million tonnes.
He said, “The entire petrochemical industry is history. Nobody has started with a 3.6-million-tonne capacity anywhere in the world.
“We are doing two million tonnes of polypropylene and 1.6 tonnes of polythene, which is approximately 3.6 million tonnes and is a huge petrochemical complex.”
Edwin said the consumption of petrochemical products in Nigeria and the sub-Saharan Africa was quite limited but noted that there would be growth in the future.
“If the cement industry had not developed like this today; if we were still living with a 3.4-million-tonne per annum capacity; today, we would have imported about 16 million tonnes of cement and you can imagine if we had imported this, it would have cost the country $2bn of foreign exchange,” he explained.
While dismissing fears that any change in government policy could affect the business, Edwin said, “We have witnessed so many political upheavals but never had any negative impact on our business as such because our business is not dependent on any government contracts or any linkage to the government.
“Fortunately, for the business we are in and the way we carry out risk analysis, we go through a rigorous analysis. One of the reasons why we carry out this rigorous risk analysis is because most of the investments come from the President’s pocket and he makes massive investment. Obviously, he will not want his investments to be wiped out because of one mistake.”
Meanwhile, Ahmed, who stood in for Dangote at the second African Refiners’ Association Week, lamented the continent’s dependence on imported refined petroleum products to support the robust economic growth of the past decade.
He said as the continent continued to enjoy rapid growth, the demand for petroleum products would increase.
“The OPEC estimates project that demand in Africa is expected to grow annually at around 1.7 per cent over the next 25 years. With the current state of our refineries, all of this additional demand may have to be imported from outside the continent if urgent steps are not taken to boost African supply,” he said.
Ahmed added that the refinery, being funded by debt and equity, including a $3bn commitment from Dangote himself, could approach the capital market in future should additional capital be needed.