Aliko Dangote emphasizes that Nigeria needs to boost its crude oil production capacity and manage its crude supply effectively to ensure sufficient feedstock for domestic refineries, facilitating a transition from being a net importer to a net exporter of petroleum products.
The Chairman of Dangote Refinery and Petrochemicals Company Limited made this statement during his keynote address at a summit organized by the Crude Oil Refinery Owners Association of Nigeria (CORAN) in Lagos.
He was represented at the event, which drew prominent government officials and key stakeholders from the midstream and downstream sectors, by Engr. Mansur Ahmed, Group Executive Director of Dangote Industries Limited.
Highlighting Nigeria’s potential as a refining hub, Dangote expressed concern that despite the country producing over 3.4 million barrels of crude oil daily, Africa imports around 3 million barrels of petroleum products each day.
He pointed out that these imports, mainly from Europe, Russia, and other regions, are projected to cost about $17 billion in 2023.
Dangote asserted that Nigeria could seize this opportunity to become a net exporter of refined petroleum products, as markets could be served more competitively from Nigeria.
“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.
“It is worth noting that the Dangote Refinery already produces sufficient diesel and jet fuel to meet Nigeria’s demand. We recently started the production of PMS and will soon ramp up to meet Nigeria’s needs. Our refined products have been exported to diverse markets, including Europe, Brazil, the UK, the USA, Singapore, and South Korea,” he added.
Dangote emphasised that Nigeria must develop a refining capacity of 1.5 million barrels per day and prioritise domestic crude supply obligations to seize this opportunity. Acknowledging the arising and future challenges, he urged the government to incentivise investors, contrasting this with the Dangote Oil Refinery, which was built without any government incentives.
“…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. The government of President Bola Ahmed Tinubu is taking active steps to achieve this through fast-tracking IOC divestments and other initiatives,” he stated.
Emphasising that global developments in the petroleum sector, particularly in Europe, will disrupt historical trade flows for refined petroleum products in Africa, Dangote stated that Nigeria is uniquely positioned to capitalise on this opportunity and become a significant player in the global oil industry. He called for consultation, collaboration, and cooperation among stakeholders.
“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.
The foremost industrialist noted that the summit’s theme, “Making Nigeria a Net Exporter of Petroleum Products,” would have seemed unrealistic a few years ago, and added that despite being Africa’s largest crude oil producer, Nigeria has historically relied on imports to meet its refined petroleum product needs.
However, he emphasised that the Dangote Petroleum Refinery and Petrochemicals is poised to transform Nigeria from a “net importer” to a “net exporter” of refined petroleum products, establishing the country as an emerging player in global downstream trade flows; with refined products already exported to various markets, including Europe, Brazil, the UK, the USA, Singapore, and South Korea.