By Lateef Adegbite
Aliko Dangote , a multi-billionaire business mogul and President , Dangote Industries had given an insight why the Refinery and Petrochemical plant, built at a cost of the North American country of the United States , US, $19 bn, was not sabotaged by the oil mafia, described as worse than the dug mafia and Suadi Arabia.
Speaking at the recent Afreximbank Annual General Meetings, AGM, and AfriCaribbean Trade and Investment Forum, in Nassau, the Bahamas, on Wednesday, June 12, 2024, Dangote may have shocked participants when he disclosed that there was nothing both the local and international oil mafia did not do ‘’to sabotage the $19 billion refinery project located at the Lekki Free Trade Zone, LFTZ, Lagos, the nation’s commercial nerve center.
The Kano state born multi-billionaire business mogul, had said that both not for the fact that he is a ‘’fighter’’, the multi-billion dollars refinery project would not have seen the light of the day. He had said that the oil mafias which who are stronger than the drug mafia had tried all sorts of things to stop him from going ahead with the project.
He had alluded to the international oil companies like Shell Petroleum Development Company, SPDC, Nigerian Agip Oil Company, NAOC, Chevron Corporation, Total Energies, and exon-Mobil , among others, which had denied his company access to their crude as they were not convinced that he could really fund the 650,000 barrels per day capacity refinery, described as one of the largest in the world.
The refinery which is expected to produce 10.4 million metric tons, Mt. of Premium Motor Spirit, PMS, popular, petrol, 4.6 Mt. of Automotive Gas Oil, AGO, or diesel and four metric tons of Aviation fuel, including 0.69 Mt of Propane, 32,000 tons of sulphur and 0.5 Mt. of Carbon black annually was said to have started production in earnest.
The good news about the Dangote refinery is that it is not putting any pressure on the national grid as it could generate 1,500 Megawatts of electricity to power its facilities to ensure production of petroleum products all year round in the country and still export to other markets in the Caribbean, West and Central African subregions and the African Continent in general.
This may have informed why the company has concluded arrangement to expand its storage capacity by 600 million litres to push it up to 5.3 billion litres of petroleum products. At present, the plant had only 4.78 billion litres of various linkage capacity.
Danote, who could not hide his feelings had said that with the expansion of its storage capacity, the refinery will hold a strategic reserve for the country in terms of petroleum products and reduce the importation of products to the barest minimum into the country.
In guarding against the outbreak of Cancer in Nigeria, Dangote appears to be using his contacts in the Presidency to influence the Authorities to enforce regulations aimed at stopping the importation of dirty fuels which has high sulphur into the country believed to be polluting the environment. The Nigerian born Multi-billionaire businessman had said that Nigerian crude attracts the most premium in the international oil market, yet Nigerian National Petroleum Corporation, NNPC, now baptized Nigerian National Petroleum Company Limited,, NNPCL, with the signing of the Petroleum Industry Bill, PIB, in August 2021, by former President Muhammadu Buhari, imports dirty fuels, which it sells to the major and the Independent Petroleum Products Marketers of Nigeria, IPMAN.
According to the Multi-billionaire, business mogul, the international oil companies have every reason to fight him because they are used to selling their own share of crude oil produce to the offshore refineries which gives them good money and now to be supplying the same crude to a local refinery which will not give them the much desired profit would be discouraging.
It was therefore not surprising why the oil companies, Dangote had said are fighting back through ‘’non supply of crude and non -purchase of crude for the project’’. Although the Kano state born business mogul, had said that ‘’it is temporary’’, insisting that the company will get over it, is making moves at importing crude from the US to get feed stock for the refinery.
He was said to have reportedly said that during the of the outbreak Asian country of China emerged COVID 19, some of the international banks , which had advanced loans to the company to part finance the project were looking forward to making sure that they push it into default of its loans so that ‘’the project will be dead on arrival’’.
Given the volte-face of the international banks may have forced the business mogul to look at the direction of the Afrexibank for financial support. He had said that the plan paid off as the company was able to secure 5.5 billion loan for the $19 billion refinery project. The US Trade and Development agency, on its part, was said to have provided a $250 billion training grant for human resource development to ensure that the refinery performs at optimum level.
The Central Bank of Nigeria, CBN, under Godwin Emefiele, the embattled former governor of the apex bank was said to have provided $130 million, equivalent of N125 billion for the Dangote refinery project to cover the domestic currency requirements while the local banks mostly financed the commercial loan components of the project.Given an inside information, Dangote had said that the company borrowed the money from both the local and foreign creditors based on its balance sheet.
Dangote, who had said that between 1918 , when it borrowed the $5.5 billion dollars, to kick start the refinery project and now, the company has paid the interest and some principal to the tune of about $2.4bn, meaning that the total outstanding debt from the project remains only about $2.7 bn.
Khalid Al-Falih, Saudi Arabia, ex-minister of Energy, had told Dangote, some five years ago, to shelve the idea of embarking on the multi-billion dollar refinery project because of the challenges faced, by the state owned company, Saudi Aramco in building a refinery.
The former Saudi Arabia minister of energy who had invited Dangote who was in his home country, to join him in breaking fast during the fasting period in his home, had honoured the invitation. The former Saudi Energy minister was said to have taken advantage of the Nigerian business mogul presence in his home to advise him to stop the multi-billion dollar refinery project embarked upon in Nigeria which may turn out to be a wasted investment. He was said to have told Dangote that ‘’normally, refineries are built by the major oil companies or sovereign countries’’ and not individuals.
The former Saudi energy minister was said to have also volunteered information that with the bilateral agreement between the Saudi Arabia and Nigeria, which are both member countries of the Organization of Petroleum Exporting countries, OPEC, the Nigerian multi-billionaire business mogul has no need to invest in the refinery as the country can always bring the products to Nigeria to meet the demand of the people. He was said to have given his words that the country will set up a terminal in in the country as it has cheap oil and could supply the products not more than 20 days maximum into the Nigerian market.
Dangote who may not have taken the advice of the ex-Saudi Arabia energy minister seriously was said to have made him to understand that he has already started the project and there was going back as he had committed much funds to it. The message Dangote may have sent across to the former Saudi minister of Energy was ‘’I am looking for advice’’
For now, Dangote is very happy that at long last the multi-billion refinery which had faced much opposition from foreign financial institutions and countries is currently producing diesel and Aviation fuel. It is expected to flood the Nigerian market soon with petrol, which price is regulated by the Federal Government and Dual Purpose Kerosene, DPK, as well.
