Dangote Oil Refinery: A Game Changer for Nigeria’s Economy, Says S&P Global
…Dangote reassures on commencement of petrol production this July
By Patience Ikpeme
In a recent onsite visit to the Dangote Oil Refinery and Petrochemicals company in Ibeju-Lekki, Lagos, the international financial analytics corporation S&P Global lauded the refinery as a pivotal asset for Nigeria’s economy.
Describing the 650,000 barrels per day (bpd) facility as a solution to Nigeria’s foreign exchange (forex) challenges and local currency pressure, S&P Global emphasized its potential to drive economic development.
During the visit, which was part of S&P Global’s sovereign credit ratings assessment of Nigeria, the team highlighted the refinery’s capacity to enhance the country’s oil sector and overall economic landscape.
Ravi Bhatia, Director and Lead Analyst for Sovereign and International Public Finance Ratings at S&P Global, underscored the transformative impact of the refinery.
“It is a very impressive facility, able to process 650,000 barrels a day when at full capacity. It is the largest single-train refinery complex in the world. It came out quite quickly. Nigeria is a big exporter of crude but has issues with importing refined fuels. So, there is a gap in the market where crude can be refined in Nigeria, save money that way, and potentially save some foreign exchange. This will be positive for the economy in the medium term. It looks positive from our assessment,” Bhatia remarked after an extensive four-hour tour of the facility.
The delegation from S&P Global was accompanied by officials from the Federal Ministry of Finance, further underscoring the strategic importance of the refinery. Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited (DIL), led the tour and reiterated the company’s vision of utilizing Africa’s abundant crude oil resources to produce refined products locally, thus fostering industrial development, job creation, and economic prosperity.
Edwin announced that production of premium motor spirit (PMS) would commence in July, as earlier promised. He assured that the products from the $20 billion facility meet international standards and can satisfy 100% of Nigeria’s demand for petrol, diesel, kerosene, and aviation fuel, with surpluses available for export.
Commending Aliko Dangote, President of Dangote Industries Limited, the S&P Global team praised the integration of advanced technologies and rigorous quality control measures within the refinery. The facility’s state-of-the-art Central Control Unit ensures seamless automation of operations.
The international rating agency’s team, including Maxmillian McGraw, Associate Director, Sovereign Ratings; Omegu Collocott, Director, Corporate Ratings; Charlotte Masvongo, Senior Analyst, Bank Ratings; and Samira Mensah, Director, Financial Services, shared a positive outlook on the refinery’s potential.
Currently operating at a capacity of 350,000 barrels per day, the refinery is set to scale up to at least 500,000 barrels per day by July/August, starting the refining of petrol and ultra-low sulphur diesel. Edwin noted the refinery’s capability to process a diverse range of crudes, including African, Middle Eastern, and US Light Oil, while adhering to Euro V specifications and international emission standards.
In a remarkable feat, the Nigerian company not only designed and built the refinery but also served as its own Engineering, Procurement, and Construction (EPC) contractor. The facility includes a self-sufficient marine infrastructure capable of accommodating the world’s largest vessels, ensuring efficient logistics.
“The refinery can produce the best quality products in the world, Euro V grade. It is one of the energy-efficient refineries and it is highly environmentally friendly. It is sophisticated with a high level of automation. The largest single-train refinery in the world is 100 per cent designed, engineered, and constructed by a Nigerian company as EPC contractor,” Edwin stated proudly.
Nigeria, a major oil producer, has historically exported crude oil for refining and imported refined products due to the lack of operational refineries. The National Bureau of Statistics (NBS) reported that Nigeria spent approximately N12 trillion on petroleum imports in 2023, a significant increase from N10 trillion in 2022.
The Dangote Oil Refinery is poised to reverse this trend, enabling Nigeria to refine its crude domestically, save on import costs, and bolster its forex reserves. This development marks a significant milestone in Nigeria’s journey towards economic self-reliance and industrialization.
