Aliko Dangote, Africa’s wealthiest individual, is considering selling his oil refinery to the Nigerian National Petroleum Company Limited (NNPCL).
The refinery, which has a capacity of 650,000 barrels per day and has been active since last year, has encountered difficulties in obtaining crude oil supplies from overseas sources.
This development comes as Dangote deals with a disagreement with a key equity partner and ongoing regulatory challenges in Nigeria.
Dangote has stated that he is committed to the refinery project’s success and is willing to sell his stake if it serves the nation. Despite experiencing hurdles and frustrations, Dangote’s willingness to sell displays his commitment to the country’s development.
The Nigerian National Petroleum Company (NNPC) has already received 6.9 million barrels of oil from the refinery since last year, and a potential sale might boost the country’s energy sector even more.
The refinery, which began operations last year after ten years of development, has a capacity of 650,000 barrels per day and intends to lessen Nigeria’s dependency on imported fuel, potentially saving up to 30% of foreign money spent on imports.
The project’s total cost was $19 billion, exceeding initial estimates.
“Let them (NNPC) buy me out and run the refinery the best way they can. They have labeled 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,” Dangote told PREMIUM TIMES in an exclusive interview on Sunday.
“We have been facing a fuel crisis since the 70s. This refinery can help resolve the problem, but it seems some people are uncomfortable with my involvement. So I am ready to let go, let the NNPC buy me out and run the refinery,” he added.
Despite certain hurdles, Dangote’s oil and gas company is moving well. The company, which has a significant foothold in Nigeria’s cement, salt, and sugar industries, is now diversifying into the energy industry.
The refinery, which is presently working at half capacity, is projected to have a big impact on the Nigerian market with its first fuel rollout in August.
To address initial hurdles in acquiring crude oil from international producers, the refinery has established alternative supply routes in Brazil and the United States.
This measure ensures that the refinery will continue to operate while arrangements with local suppliers are finalized. Furthermore, the NNPC has already delivered 6.9 million barrels of oil to the plant, with additional deliveries expected.
Dangote said, “As I approach my 70th birthday, I’m reminded that my legacy is what matters most. I’m dedicated to creating a lasting impact in Nigeria, and I’m confident that this refinery will be a game-changer for our nation’s energy sector.”
“Four years ago, one of my wealthy friends began investing abroad. I disagreed and urged him to rethink in the interest of our country. He blamed his actions on policy inconsistencies and interest group shenanigans. He has been taunting me recently, saying he warned me and has been proven right,” Dangote added.
A disagreement has arisen between the Dangote Group and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) over the quality of diesel fuel in Nigeria.
Last month, Devakumar Edwin, vice president of oil and gas of the Dangote Group, said that the NMDPRA allowed the import of substandard fuel.
Farouk Ahmed, chief of the NMDPRA, responded by claiming that diesel from Dangote’s refinery, as well as other sources, has excessive sulphur levels that exceeded West African standards.
However, during a recent tour of the Dangote Petroleum Refinery and Dangote Fertiliser Limited complex by members of the House of Representatives, Dangote rejected these assertions, citing lab testing indicating a sulphur content of 87.6 ppm in their diesel.
He requested that the regulator undertake an unbiased evaluation of the quality of refined products from his refinery with imports.
Dangote also declared on Saturday that he would cease his investment in Nigeria’s steel industry to prevent monopolistic claims.
“You know, about doing a new business which we announced, that is, steel. Actually, our board has decided that we shouldn’t do the steel because if we do the steel business, we will be called all sorts of names like monopoly. And then also, imports will be encouraged,” Dangote said.