BY SAM OTUONYE
As the imbroglio continues to hang over Africa’s largest private refinery, Dangote Refinery and Petrochemical Industry, the promoter and richest man in Africa, Alhaji Aliko Dangote is forced to take a critical and painful decision to fling the 650,000 barrel-per day capacity refinery.
Dangote, in a recent interview with a media platform has disclosed his willingness to sell his multibillion-dollar oil refinery to the state-owned energy company, NNPC Limited.
This decision came amid escalating disputes with Nigeria’s oil and gas regulatory authorities and equity partners, as he takes a poignant reflection on his investment choices in Nigeria.
Dangote, who broke the news yesterday, Sunday, said he is currently considering selling the 650,000 barrel-per-day refinery to the national oil company, NNPC Ltd, for being labeled a monopolist.
Dangote’s 650,000 barrel-per-day refinery, which became operational last year after a decade-long construction period, cost $19 billion with a vision to reduce Nigeria’s reliance on imported fuel and save up to 30% of the country’s foreign exchange spent on imports.
However, the project has faced significant challenges, including supply chain issues and regulatory disputes.
Dangote states that despite Nigeria’s long-standing fuel crisis and the $19 billion refinery’s potential to resolve it, there are vested interests unhappy with the project who are willing to undermine its success.
He urged the state-owned oil company to buy him out, suggesting that this might dispel accusations of him being a monopoly.
“Let them (NNPCL) buy me out and run the refinery the best way they can. They have labelled 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 stated.
The refinery, set for its first roll-out of petrol in August, has been operating at just above half capacity due to difficulties in sourcing crude oil from local and international producers.
These companies either demand exorbitant premiums or claim unavailability of the product. NNPC, a key supplier, had delivered only 6.9 million barrels of oil to the plant by May, far less than required. This shortfall has forced the refinery to look to countries like Brazil and the US for supplies.
Despite his commitment to Nigeria, Dangote admitted that the obstacles faced by his refinery have led him to reconsider his investment strategy.
“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 actions in the interest of his country. He blamed his action on policy inconsistencies and shenanigans 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.”
Adding to the refinery’s woes, Devakumar Edwin, Vice President of Oil and Gas at Dangote Group, recently accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of allowing marketers to import substandard fuel.
The Authority Chief Executive, Mr. Farouk Ahmed, had few days ago told Nigerians that the Dangote Refinery and Petrochemicals Company’s products are inferior compared to its foreign counterparts, with between 650 and 1,200 sulphur content.
Farouk had also alleged that Dangote had asked that the NMDPRA stop importation of fuel so as to enjoy some form of monopoly, adding that it has not been issued any license by the Nigerian Midstream and Downstream Petroleum Regulatory Authority to operate in the country and as such it is operating illegally
He had also debunked Dangote’s earlier allegations that its operations are being scuttled owing to lack of supply of crude oil by International Oil Companies, adding that Dangote’s refinery is at the pre-commissioning stage of about 45 per cent in completion.
Farouk said: “Dangote Refinery, as well as some major refineries, like Walter Smith’s refinery, other refineries, they produce 650 to 1,200 ppm. So, in terms of quality, their quality is much, much inferior to the imported commodities.”
“So, we cannot rely heavily on one refinery to feed the nation because the company is requesting that we should suspend or stop all importation of petroleum products, especially AGO and Jet Kero, and direct all marketers to the refinery.
“That is not good for the nation in terms of energy security, and that is not good for our markets in terms of monopoly. So, in terms of quality, currently, the AGO quality in terms of sulfur is the lowest as far as a West African requirement of 50 ppm.
In response, Dangote invited members of the House of Representatives to tour the refinery and witness lab tests comparing the sulphur content of its diesel with imported samples.
The tests revealed that Dangote’s diesel had a sulphur content of 87.6 ppm, significantly lower than the imported samples, which had levels exceeding 1800 ppm and 2000 ppm.
Expressing concern over the controversy surrounding the quality of imported refined products into Nigeria, Speaker Rt. Hon. Abass stated that the Green Chamber would establish a committee to investigate the matter thoroughly. He emphasised that sampled products from various sources would undergo testing as part of this initiative.
Dangote, reflecting on his situation, noted, “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.”
The escalating controversies have led Dangote to announce plans to halt his investment in Nigeria’s steel industry to avoid accusations of monopolistic practices.
“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,” he said.
Meanwhile, Nigerians have expressed divided views over the trending matter, as some are berating Dangote for always trying to thrive in monopoly, while others fault the federal government for allowing its four refineries to remain comatose for years only to suddenly wake to frustrate Dangote’s efforts.