Dangote Slams DAPPMAN, Declines NNPC Refinery Acquisition
The President of the Dangote Group, Alhaji Aliko Dangote, has rejected suggestions that he could buy one of the moribund government refineries instead of expanding the capacity of his refinery from 650,000 barrels per day to 1.4 million bpd.
Dangote stated this recently while announcing the expansion of the $20bn facility in Lekki, Lagos State.
Dangote had told newsmen on Sunday that the refinery would become the world’s largest in the next three years.
However, there were questions about why he decided to expand the Lagos refinery instead of buying one of the dormant ones under the management of the Nigerian National Petroleum Company Limited.
Reacting, Dangote, who was with his friend, Femi Otedola, said he would rather scale up his facility than be accused of a monopoly.
Dangote said groups such as the Depot and Petroleum Products Marketers Association of Nigeria and other wealthy individuals in the country should instead buy the refineries or invest in building new ones.
“Buying those refineries? Once we touch them, you will hear a lot of noise. There are other people with a lot of money, maybe more cash than we have, who we believe should go and try their own luck, so that there won’t be talk about monopoly.
“There will be talk about other people having opportunities. And I think we have a group like DAPPMAN; they should go and buy some of the refineries. If they are not for sale, then they should actually go and put up their own refinery. So, I think it is far better for other people to go and buy, so we will not be the only ones supporting Mr President’s policy,” he said.
Dangote disclosed that President Bola Tinubu had promised to support the petroleum sector with crude supply.
“At least there is now support from the President. The President is supporting this sector to refine all our crude into petroleum products. And I think other people, too, should take this opportunity.
“For us, we already have our own infrastructure, and we want to double our capacity rather than going somewhere else. We already designed it that way anyway. It is just that we said, ‘Fine, let us start. If the condition is conducive, we will go ahead and double our capacity.’ And that is what we are doing. We are actually more than doubling a bit. We are going to 1.4 million from 650,000.
“So, I think there are thirty people that have this sort of idea of either working in partnership with the NNPC to revive those refineries, which will help. All of us will have to contribute our quota to be able to achieve that $1tn economy. It does not come that easily. So, we are doing our own, and I believe others should do theirs too,” Dangote stated.
Recall that Dangote had, in May, said the NNPC refineries might never work again.
He stated that the refineries had gulped up to $18bn, yet they had refused to work.
Dangote recalled how the late President Umaru Yar’Adua aborted his acquisition of the government refineries. He said he and his team had to return the refineries to Yar’Adua a few months after former President Olusegun Obasanjo left office in 2007.
According to him, the former managers of the refineries had told Yar’Adua that Obasanjo sold the facilities below their value as a parting gift to the consortium he was part of.
“We bought the refineries in January 2007. Then we had to return them to the government because there was a change of government. And the managing director at that time convinced Yar’Adua that the refineries would work. They said they just gave them to us as a parting gift or so. And as of today, they have spent about $18bn on those refineries, and they are still not working. And I don’t think, and I doubt very much, if they will work,” he said in May.
But the Group Chief Executive of the NNPC, Bayo Ojulari, said the Port Harcourt, Warri and Kaduna refineries would work again.
Calls for the privatisation of the government-owned refineries, under the management of the NNPC, intensified following the recent shutdown of the 60,000-barrel-per-day old Port Harcourt refinery, six months after it was declared operational.
The Warri refinery was also shut down one month after the former Group Chief Executive Officer of the NNPC, Mele Kyari, declared it open in December. The Manufacturers Association of Nigeria said the refineries were a drain on the country’s economy, calling on the Federal Government to sell off the facilities.
The PUNCH reports that the Federal Government has consistently expended resources on the refineries, which became moribund many years ago. It was gathered that $1.4bn was approved for the rehabilitation of the Port Harcourt refinery in 2021; $897m was earmarked for Warri and $586m for Kaduna refineries.
N100bn was reportedly spent on refinery rehabilitation in 2021, with N8.33bn monthly expenditure. $396.33m was allegedly spent on turnaround maintenance between 2013 and 2017. Despite all the financial allocations, the refineries remain unproductive.
On Wednesday, Ojulari said the company was assessing the operational and commercial viability of its three major refineries to determine whether to overhaul or repurpose them for enhanced efficiency and profitability.
According to the company, the ongoing technical and commercial review is part of a broader plan to reposition the refineries as sustainable, revenue-generating assets that can meet Nigeria’s fuel demand and align with international operational standards.
It stated that the review marks the beginning of a new era in Nigeria’s refining sector.
According to Ojulari, NNPC Limited is currently in the “Technical and Commercial Review” phase, aimed at assessing the operational state of all three refineries and determining whether to high-grade or repurpose the facilities for optimal performance and long-term sustainability.
He revealed that the next step in the company’s refinery rehabilitation journey would involve NNPC engaging Technical Equity Partners with proven track records in operating world-class refineries.