Offer to Sell Dangote Refinery to NNPC
Aliko Dangote, Africa’s richest man, has expressed his willingness to sell his oil refinery to the Nigerian National Petroleum Company (NNPC) Limited.
In an interview with Premium Times, Dangote addressed ongoing disputes between his refinery and Nigerian regulatory authorities, stating,
“Let them (NNPCL) buy me out and run the refinery the best way they can. They have labelled me a monopolist. That’s an incorrect and unfair allegation, but it’s okay. If they buy me out, at least, their so-called monopolist would be out of the way.”
Background and Challenges
The Dangote Refinery, inaugurated in May 2023, is a 650,000 barrel-per-day facility situated in the free zone area of Ibeju-Lekki, Lagos. The refinery began producing diesel on January 12, 2024, with petrol production scheduled for August.
However, various factors, including crude supply challenges and a fire outbreak, have delayed operations. Dangote highlighted the difficulties in securing crude feedstock from international oil companies (IOCs) in Nigeria, which forced the refinery to import crude from countries like Brazil and the US.
Investment and Criticism
Dangote’s decision to invest billions of dollars in the Nigerian economy has faced criticism and skepticism from friends and associates. Reflecting on these challenges, Dangote mentioned,
“Four years ago, one of my very wealthy friends began to invest his money abroad. I disagreed with him and urged him to rethink his action in the interest of his country.”
Despite these efforts, Dangote acknowledged that policy inconsistencies and the actions of interest groups have complicated his investments.
Current Production Status of the Dangote Refinery
The refinery had previously announced a supply deal with the NNPC and agreed to a 20 percent equity participation, though only 7.2 percent of this stake has been fully paid.
Despite claims from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) that the Petroleum Industry Act (PIA) facilitates willing buyer-willing seller transactions, Dangote Industries Limited maintains that IOCs have been obstructing its efforts to purchase crude feedstock.
Additionally, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has criticized local refineries, including Dangote’s, for producing inferior products compared to imported ones.
Dangote concluded by reiterating his readiness to sell the refinery, emphasizing his commitment to the country’s development.
“Everything I do is in the interest of my country. So, I am ready to let go, let the NNPC buy me out, run the refinery. At least the country will have high-quality products and create jobs,” he stated.
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