Aliko Dangote, the President/Chief Executive Officer of Dangote Group, revealed that the $20 billion Dangote refinery in Lekki, Lagos, will commence operations by refining 350,000 barrels of crude oil daily.
In an interview with the Financial Times, Dangote disclosed the refinery’s plan to receive an initial consignment of approximately six million barrels of crude in December 2023.
“We’re commencing operations with 350,000 barrels a day,” stated Dangote, expressing confidence in the refinery’s potential to reach its capacity of 650,000 barrels a day by the end of 2024. However, the International Monetary Fund (IMF) has expressed doubts about the refinery reaching more than a third of its capacity by 2025.
The refinery, touted as the world’s largest “single train” facility, has the potential to save Nigeria billions in foreign exchange, currently spent on imported fuel. The CEO criticized the country’s inability to refine its own crude oil adequately despite being a major oil producer for over five decades.
Acknowledging the project’s challenges, including significant delays and cost overruns, Dangote admitted concerns about potential risks to his business empire. Despite obstacles, he expressed gratitude that the project had finally reached fruition.
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However, Dangote finds himself facing intense pressure amidst his refinery’s imminent launch. Allegations of underhand business practices and undue access to foreign exchange from the central bank have surfaced. He has vehemently denied these accusations. Furthermore, there have been reported difficulties in obtaining crude supply from the Nigerian National Petroleum Corporation (NNPC), although Dangote remains optimistic that oil supply will commence shortly.
Amidst speculation and rumors regarding the refinery’s efficiency and internal disputes, Dangote refrained from elaborating on the crude supply issues with NNPC, emphasizing that all supply-related concerns had been resolved.
He dismissed notions of NNPC seeking a larger stake in the refinery, indicating that NNPC was content with its current 20% ownership. He projected the refinery’s revenue to reach $25 billion annually at full capacity and revealed plans to eventually list the refinery as a separate entity on the Lagos stock exchange.
