Africa’s wealthiest man, Aliko Dangote, has expressed his willingness to transfer ownership of his multibillion-dollar oil refinery to the state-owned energy company NNPC Limited. This announcement comes amid a new dispute with a key equity partner in the refinery, adding to ongoing tensions with regulatory authorities in Nigeria.
The 650,000 barrel-per-day refinery, which began operations last year after a decade of construction, cost $19 billion—more than double the initial estimate. The refinery aims to reduce Africa’s largest oil producer’s dependence on imported fuel and save up to 30 percent of the total foreign exchange spent on imports.
“Let them (NNPCL) 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,” Mr. Dangote told PREMIUM TIMES in an exclusive interview on Sunday. “We have been facing fuel crises since the 70s. This refinery can help in resolving the problem, but it appears some people are uncomfortable that I am in the picture. So I am ready to let go, let the NNPC buy me out, run the refinery.”
Dangote’s venture into the oil and gas sector, following years of dominance in Nigeria’s cement, salt, and sugar industries, has encountered significant challenges. The refinery, which is set to release its first petrol to the Nigerian market in August, has been operating at just over half its capacity since January, partly due to difficulties in sourcing crude oil from international producers. Dangote Refinery claims that suppliers are either demanding high premiums or stating that the crude is unavailable.
NNPC, which once had a favorable relationship with the refinery, has delivered only 6.9 million barrels of oil to the plant since last year, according to S&P Global Platts. Although NNPC Limited has a supply agreement and a previously agreed 20 percent equity participation, only 7.2 percent of this equity has been fully paid for. The refinery has had to turn to countries like Brazil and the US to meet its crude supply needs.
“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 stated. “This refinery can help in resolving the problem, but it does appear some people are uncomfortable that I am in the picture. So I am ready to let go, let the NNPC buy me out, run the refinery. At least the country will have high-quality products and create jobs,” he added.
Mr. Dangote also mentioned that the difficulties his refinery faces have vindicated friends and associates who advised caution. “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 the actions 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,” Dangote said.
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 marketers to import substandard fuel into the country. In response, the regulatory authority’s chief, Farouk Ahmed, claimed that diesel from Dangote’s refinery and other modular refineries contained high levels of sulphur, which could damage vehicle engines and harm the environment. “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,” Mr. Ahmed told journalists last Thursday.
