ALIKO Dangote has emphasized the need for Nigeria to boost its crude oil production capacity and manage its crude supply efficiently to ensure adequate feedstock for domestic refineries.
This, he says, is essential for Nigeria to shift from being a net importer to a net exporter of petroleum products.
Dangote, the Chairman of Dangote Refinery and Petrochemicals Company Limited, conveyed this message through Engr. Mansur Ahmed, Group Executive Director of Dangote Industries Limited, during a keynote speech at a summit organized by the Crude Oil Refinery Owners Association of Nigeria (CORAN) in Lagos.
The event attracted prominent government officials and key stakeholders from Nigeria’s midstream and downstream sectors.
Discussing Nigeria’s potential as a refining hub, Dangote expressed concern that despite Africa producing over 3.4 million barrels of crude oil daily, the continent imports about 3 million barrels of petroleum products each day, costing an estimated $17 billion in 2023, with imports primarily coming from Europe, Russia, and other regions.
He stressed that Nigeria is well-positioned to leverage this situation and become a net exporter of refined petroleum products, noting that the country’s location would reduce logistics costs and eliminate floating storage needs, allowing for just-in-time delivery of petroleum products.
Dangote also highlighted that Nigeria and Africa could achieve self-sufficiency in petroleum products, much like how Dangote Cement has helped make the continent self-sufficient in cement production.
Dangote further pointed out that the Dangote Refinery already produces enough diesel and jet fuel to meet Nigeria’s demand, and has recently commenced PMS (petrol) production, with plans to scale up to meet national needs.
The refinery has also started exporting refined products to markets including Europe, Brazil, the UK, the USA, Singapore, and South Korea.
He underscored the need for Nigeria to increase its refining capacity to 1.5 million barrels per day and prioritize domestic crude supply obligations.
While acknowledging future challenges, he urged the government to provide incentives to investors, contrasting it with the Dangote Refinery, which was built without government incentives.
Dangote also highlighted the need for prudent management of oil revenues, citing countries like Norway that invest oil proceeds into future funds, while African nations, he said, are spending oil revenues meant for the future.
He commended President Bola Ahmed Tinubu’s government for its efforts to fast-track international oil company (IOC) divestments and other initiatives aimed at boosting Nigeria’s oil production.
He concluded by calling for collaboration among stakeholders to help Nigeria capitalize on global shifts in the petroleum industry, especially changes in Europe, which could disrupt Africa’s traditional refined product trade routes.
Becoming a significant exporter of refined products, Dangote noted, would improve Nigeria’s balance of trade and generate much-needed foreign currency.
He also stated that the summit’s theme, “Making Nigeria a Net Exporter of Petroleum Products,” once seemed improbable, given Nigeria’s reliance on imported refined products despite being Africa’s largest crude oil producer.
However, he affirmed that the Dangote Refinery is set to transform the nation into a net exporter of refined petroleum products, with exports already reaching several global markets.