Dangote Calls for Increased Crude Production to Boost Exports
By Patience Ikpeme
Aliko Dangote, Chairman of Dangote Refinery and Petrochemicals Company Limited, has called on Nigeria to enhance its crude oil production and manage its supply more efficiently to ensure adequate feedstock for domestic refineries.
This, he said, is crucial for Nigeria to transition from being a net importer to a net exporter of petroleum products.
Speaking during his keynote address at the summit organized by the Crude Oil Refinery Owners Association of Nigeria (CORAN) in Lagos, Dangote stressed the importance of refining capacity for Nigeria’s economy and highlighted the country’s potential to dominate the African petroleum products market.
Nigeria, Africa’s largest crude oil producer, pumps over 3.4 million barrels of oil per day. Yet, Africa as a whole imports around 3 million barrels of refined petroleum products daily, a reliance that cost the continent an estimated $17 billion in 2023.
According to Dangote, most of these imports come from Europe, Russia, and other regions. He urged Nigeria to seize the opportunity to reverse this dependency, positioning itself as a key exporter of refined products.
“Both the crude oil and the petroleum products will travel shorter distances. The logistics costs of floating storage will be eliminated, and countries can purchase their petroleum product requirements just-in-time. Nigeria and Africa can become completely self-sufficient, and we can keep all the value on our shores,” Dangote stated.
He compared the potential transformation of Nigeria’s oil refining sector to the successes achieved in the country’s cement industry, asserting that Nigeria could follow a similar path to self-sufficiency and global competitiveness.
Dangote further noted that his refinery already produces sufficient diesel and jet fuel to meet Nigeria’s demands and has begun producing Premium Motor Spirit (PMS), with plans to ramp up production to fully cater to Nigeria’s needs. Refined products from the Dangote Refinery have already been exported to various markets, including Europe, the UK, Brazil, the USA, Singapore, and South Korea.
Representing Dangote at the summit, Engr. Mansur Ahmed, Group Executive Director of Dangote Industries Ltd, emphasized the need for Nigeria to increase its refining capacity to 1.5 million barrels per day and prioritize domestic crude supply obligations to ensure the country’s refineries are well-supplied. Ahmed called on the government to provide incentives for investors, unlike the Dangote Oil Refinery, which he noted was built without government support.
Ahmed pointed to the contrasting example of countries like Norway, which channel oil proceeds into future savings, whereas many African countries expend oil revenues from future production. He highlighted the need for Nigeria to adopt sustainable strategies, expand its crude oil production, and capitalize on the global market changes in the petroleum sector.
Global developments, particularly in Europe, are expected to disrupt traditional trade routes for refined petroleum products, creating opportunities for Nigeria to emerge as a key supplier. According to Dangote, consultation and collaboration among stakeholders will be critical to realizing Nigeria’s potential as a refining hub.
“As a vibrant exporter of refined products, Nigeria will witness an improvement in its balance of trade and generate much-needed foreign currency. Nigeria’s potential as a refining hub is clearly not in doubt; let us work together to make it happen,” Dangote urged.
The summit, themed “Making Nigeria a Net Exporter of Petroleum Products,” drew widespread praise for Dangote’s achievements, with Abdulrazaq Isa, Chairman of IPPG/Waltersmith Refinery & Petrochemicals Co. Ltd, commending the company for producing Euro-V standard products. Isa also called on the government to support domestic refiners by ensuring crude availability and tackling smuggling through effective pricing and monitoring.
Captain Emmanuel Iheanacho (rtd), Chairman of CORAN’s Board of Trustees and CEO of Integrated Oil & Gas, noted that despite the advent of local refining capacity, tank farms would still be essential. He urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to consider cancelling import licences as Nigeria now has the capacity to meet its domestic demand for refined petroleum products.
Huub Stokman, Chairman of the Major Energies Marketers Association of Nigeria (MEMAN), echoed Dangote’s sentiments, stating that Nigeria was on the verge of becoming Africa’s refining powerhouse, with significant benefits for the nation’s economy. CORAN Chairman Momoh Oyarekhua also highlighted the importance of resolving crude supply challenges and pledged cooperation with regulators to achieve the industry’s goals.
The Minister of State for Petroleum Resources (Oil), Senator Heineken Lopkobiri, assured the gathering that the federal government is working to boost crude production and support domestic refineries, while Dr. Doris Uzoka-Anite, Minister of Industry, Trade, and Investment, reiterated the administration’s commitment to adding value to Nigeria’s mineral resources before export.
Two panel discussions were held during the summit, focusing on Nigeria’s downstream refining sector and strategies for achieving petroleum product self-sufficiency.
The Dangote Petroleum Refinery and Petrochemicals is positioned to transform Nigeria from a net importer of petroleum products to a net exporter, marking a significant mi
lestone in the country’s oil industry.
