Aliko Dangote, the President and Chief Executive Officer of Dangote Group, has revealed that the much-anticipated $20 billion Dangote refinery, located in Lekki, Lagos, is poised to commence operations by processing 350,000 barrels per day (bpd) of crude oil.
In an interview with the Financial Times, Dangote shared that the refinery is expected to receive approximately six million barrels of crude in December 2023.
“We’re starting with 350,000 barrels a day,” affirmed Dangote, noting that a deal has been finalized for the “first cargo of about 6 million barrels” set for delivery next month.
The business magnate expressed confidence that the refinery could reach its full capacity of 650,000 barrels a day by the end of 2024, despite skepticism from the International Monetary Fund (IMF), which has cast doubt on the refinery reaching more than a third of its capacity by 2025.
The Dangote refinery, touted as the world’s largest “single train” facility with a singular distillation unit, has the potential to save Nigeria significant foreign exchange currently expended on imported fuel when operating at its maximum capacity.
Dangote expressed disappointment in the fact that Nigeria, a significant oil producer for over five decades, has struggled to refine its crude in sufficient quantities.
He deemed it “shameful” and emphasized the refinery’s potential to transform this narrative.
Despite the monumental scale of the project, which experienced considerable delays and exceeded the budget by about $8 billion, Dangote acknowledged moments of doubt regarding its impact on his business empire.
He reflected on the challenges faced, stating, “The challenges that we faced, I don’t know whether other people can face these challenges and even survive. It’s either we sink or we sail through. And we thank the Almighty that at least we’ve arrived at the destination.”
However, in the midst of what should be a triumphant period for Dangote, he faces intense scrutiny.
Accusations of underhand business practices and allegations of unfair access to foreign exchange have been leveled against him by a rival industrialist.
Additionally, the Nigerian National Petroleum Corporation (NNPC) has encountered challenges in supplying the required crude to the refinery.
Dangote, however, remains optimistic, asserting that the issues will be resolved, and oil will start flowing within weeks.
Concerns have also emerged about the refinery’s efficiency, with some doubting its viability.
Rumors circulate regarding strained relations between Dangote and Bola Tinubu, the current president, adding to the complexities surrounding the project.
Dangote, in response to criticisms, highlighted the lack of understanding among rivals about the intricacies of running a business that is not only the country’s largest private-sector employer but also its biggest taxpayer.
He emphasized, “Sometimes when people talk about us, it’s like the government is holding everybody down and allowing us alone to fly.”
Regarding the crude supply tussle with NNPC, which owns a 20 percent stake in the refinery, Dangote chose not to engage in a blame game. He asserted that all supply issues have been resolved and rejected suggestions that NNPC is seeking a larger share in the refinery.
As the Dangote refinery prepares to revolutionize Nigeria’s refining landscape, Aliko Dangote envisions its future as a separate entity, with plans for it to be eventually listed on the Lagos stock exchange.
