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What City People Found Out
There is a big battle going on right now in the Oil sector. It is the battle between the Big Mafia controlling the Oil industry and Dangote Refinery, founded by Alhaji Aliko Dangote.
For months now, they have come together to block Dangote Refinery from getting crude Oil to run his refinery, claiming that there is no way the new refinery can be accommodated in the existing sharing formular of crude oil production in Nigeria. They want Dangote to go and buy at exorbitant price in the open market.
To stop and frustrate Dangote they have embarked on the demarketing of Dangote Refinery, which has been going on for days now on social media, alleging all sorts against the Refinery. They have also criticised Alhaji Aliko Dangote, President/CEO of Dangote Group as wanting to create a Monopoly.
Farouk Ahmed, the CEO of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) got many angry when he alleged that the Dangote Refinery is 45% complete and that it is still in the pre-commissioning stages and that it is yet to be licensed.
“We cannot rely entirely on one refinery to feed the nation because Dangote, is requesting that we suspend or stop imports of AGO and DPK and direct all marketers to his refinery. The Management of Dangote has promptly denied the claim.
Farouk Ahmed also said in terms of Quality, Dangote’s current AGO suffers from the lowest sulfur quality (650-1,200pmm) falling short of West Africa’s 50ppm limit.
Some others have gone ahead to described Dangote Refinery as a scam. “It is a government premature monster baby. It cannot survive without the feeding bottle provided by the Government,” one of them said. Again, this allegation has been promptly denied by the Management of Dangote.
According to allegation, he was the one who killed all the 4 refineries and hijacked the industry-to monopolise it. Again people have asked how Dangote killed the 4 refineries that have not worked for years.
But City People has found out that many of the allegations are untrue. And they have been thrown out into the public space to confuse unsuspecting public.
All these has angered many people. Many are angry that after hinging all their hopes on a crash in the cost of petrol, through Dangote Refinery’s production, the authorities have dashed their hopes saying the refinery is only 45% completed.
Like one angry manufacturer remarked, there is no production facility anywhere in the world that is 100% completed. All factories usually have expansion plans. Whether it is 5% or 85% complete, this Refinery can produce AGO (Diesel), Jet A-1 and Petrol. What is the relevance of it being 45% finished.?
Aliko, is dispensing Diesel and Aviation Fuel. And he says Petrol will be available as from August”
“What is of concern to us right now is how to ease the pains of Nigerians by reducing the pump price of Petrol. We are talking about saving Nigeria a lot of FX and making us self-sufficient.”
The Question people are asking is if Dangote needs local Crude. Have you given him Crude? Yes or No. I don’t think Dangote has ever told anyone to stop importation of other products? No. Even if he did how does that relate to not giving him Crude. He needs Crude so badly. He is importing Crude and paying with FX. As to the issue of Quality, most refineries are Crude type specific. We have the best Crude in the world with the lowest sulphur content.”
As to Licensing, don’t you think for the good of the people, he should be given a Licence free, even help him fill the forms.
Two Sundays back, City People and a few Media executives visited the Refinery in Lagos and found that Alhaji Aliko Dangote had established a world class Refinery that can meet Nigeria’s Gasoline (Petrol) needs. For about 6 hours or more, City People was taken round. Alhaji Aliko Dangote, the President/CEO of the company was on ground to conduct us round the 650,000 barrels per day (bpd) Crude Oil refinery which covers an area of approximately 2,635 hectares.
He was ably assisted by Devakumar Edwin, the ever hardworking Group Executive Director, Strategy, Portfolio Development & Capital Projects, Dangote Industries, Limited. Devakumar Edwin, calls the 650,000 barrels per day Dangote Petroleum Refinery & Petrochemicals a Game Changer. He says the Refinery has the capacity to meet Nigeria’s daily need of refined Petroleum products. “Many new manufacturing outfits are to emerge which will depend on both the products and by-products of the refinery, as feedstock in their production processes. These linkages will create more jobs, add value to Nigeria’s Crude Oil products and at the same time produce more raw materials for local manufacturing”.
He says the entry of Dangote Refinery has changed the narrative in the Oil industry. How? “Because the distributive system which sees Nigeria as an end destination will now have it as country of origin. The change comes with attendant benefits, as vessels will berth and queue in Nigeria to receive products for export,” he explained.
According to him, “part of our Strategy at Dangote Petroleum is designed to process large variety of crudes, including many of the African Crudes, some of the Middle Eastern Crudes and the US Light Tight Oil. That way, the refinery will have continous supply of Crude Oil, if there are disruptions in supply from Nigerian Oil fields.”
“Here at Dangote Petroluem, we have decided to maximise the refining of Premium Motor Spirit (PMS). That is Gasoline which is in high demand. The way it is structured refining of Gasoline will account for 53% of the production capacity compared to 22% as obtained in existing refineries in Nigeria. In doing this, we intend to Maximise Value addition, extracting Maximum value from every barrel of Crude”.
With all these in place, many Oil watchers were shocked, last week at the negative stories that flooded the social media alleging that the investment of over $20 billion dollars is a scam. How come, many wondered? How can a Refinery that the former President Buhari commissioned could have been fake or a fluke?. City People spoke to the Management of the Refinery and gathered that many of the allegations are baseless and unfounded.
City People gathered that the plot is to blackmail Dangote Refinery into submission. We heard that the Oil Mafia is afraid that if Dangote is given sufficient crude oil, he will crash the current price of petrol across the country like he did last January when he crashed the price of Diesel and brought it down drastically to N940.00.
We found out that many of those fighting Dangote Refinery are crude oil Traders who prefer for Nigeria to continue to import petrol.
We can tell you a lot more. This world class Dangote Refinery commenced full operations in early 2024.
Alhaji Aliko Dangote, has built what has been described as Africa’s biggest Oil refinery and the world’s biggest single-train-facility with 650kbpd capacity, with state-of-the-art Technologies.
It has the following: dedicated loading gantries with 86 loading bays; dedicated marine facilities for off take of crude and loading of petroleum products, 990ktpa Polypropylene plant, 36 ktpa sulphur and 585ktpa carbon black production, a total storage capacity of 4.5 billion litres which can cover 20 days crude requirement and product storage for 15 days of Nigeria’s gasoline consumption.
What makes the Dangote Refinery special?
We can tell you. City People spent a day at the Refinery on Sunday 14th July and we were astounded at the operations going on at the refinery.
What makes it special is because of the Location of the refinery at the Lekki Free Trade Zone, which gives it a Logistics advantage relative to imports. There is also the advantage of Ready access to the West African and Latin American markets. There is also it’s proximity to Nigeria’s largest market for petroleum products.
What makes it special is also the Configuration. The Refinery’s configuration significantly enhances its economics by minimising production of low value products (e.g. LPFO) and incorporation flexibility to allow swing to move profitable crudes and products.
There is also the advantage of Scale.
The large scale minimises production costs and provides ability to serve a large market.
When City People visited the Dangote Refinery that Sunday, we found that the project is now fully online, with the successful completion of trial run in January 2024.
We found that Dangote Refinery’s Refined and intermediate products include polypropylene, naptha, RCO, gasoline, Diesel and Jet fuel.
We realised that steady state production phase commenced in March 2024.
We found out that the Refinery is ramping up production to reach 500kbpd (15 crude cargoes a month) by next August, 550kbpd by end of the year, and 650kbpd by first Quarter of 2025.
We also confirmed that Gasoline production commenced in July, with sales from August. We also confirmed that Annual revenue is projected to exceed $26billion. The Management of Dangote Refinery says at steady state, production will exceed Nigeria’s demand.
The President/Chief Executive of Dangote Industries, Limited, revealed to City People why his company conceived Dangote Petroleum Refinery & Petrochemicals. He said it was to be an answer to the perennial shortage of Premium Motor Spirit (PMS) in the country.
The Refinery has 650,000 barrels per day refining capacity.
What this means, according to Aliko, is that it marks the attainment of self-sufficiency in domestic refining of petroleum products and provides excess capacity in refined products, which will now go for the export market.
He broke it down to a great extent. According to him, Dangote Refinery, is designed to maximise gasoline production, which will account for 53% of the production capacity compared to most of the refineries in the world, which produce between 20 to 25% gasoline. He says the petroleum refinery can meet 100% of the requirements of Nigeria, of all the liquid fuel products – Gasoline (PMS), Diesel (AGO), Kerosene (DPK) and Aviation Jet Fuel (Jet A-I).
According to Aliko who is very optimistic that his refinery will get local refinery, “our new petroleum refinery is coming with many benefits. Refined petroleum is the main source of energy in Transport and powering of machines”.
“The byproducts are also the basic materials of many diverse products as plasticcs, pharmaceuticals, solvents, fertilisers, pesticides, and clothing. Our strategy of refining locally has created jobs in the domestic economy instead of providing jobs in developed economies. With the coming on stream of this refinery, thousands of Direct and Indirect jobs are already being generated from the activities and operations connected to the project. These jobs are helping to address the challenge of Youth unemployment”.
Aliko Dangote, envisages that 60% of the production capacity of the Dangote Refinery can meet the entire requirement of Nigeria, while the remaining 40% has been earmarked for Export.
“Exporting refined petroleum products will not only save the huge amounts of foreign exchange but will also trigger massive inflow of the same into the domestic economy.
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