Nigeria must enhance its crude oil production capacity and effectively manage its crude supply to ensure adequate feedstock for domestic refineries, to transit from a net importer to a net exporter of petroleum products.
Chairman of Dangote Refinery and Petrochemicals Company Limited, Aliko Dangote, made this assertion during his keynote address at a summit held in Lagos by the Crude Oil Refinery Owners Association of Nigeria (CORAN).
The event, according to the company’s statement, attracted top government officials and key stakeholders from the midstream and downstream sectors.
Addressing Nigeria’s potential as a refining hub, Dangote was said to have expressed concern that despite producing over 3.4 million barrels of crude oil daily, Africa imports around 3 million barrels of petroleum products daily.
He noted that these imports, primarily from Europe, Russia, and other regions, are estimated to cost approximately $17 billion in 2023.
He urged Nigeria to take advantage of this to become a net exporter of refined petroleum products.
He was quoted as saying: “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. We have done it in cement, and we can certainly do it for petroleum products.”
Mr. Dangote, represented by the Group Executive Director, Dangote Industries Ltd., Mansur Ahmed, emphasised that Nigeria must develop a refining capacity of 1.5 million barrels daily and prioritise domestic crude supply obligations to seize this opportunity.
He added that “Nigeria’s potential as a refining hub is clearly not in doubt; let us work together to make it happen,” which aligns with the summit’s theme: ‘Making Nigeria a Net Exporter of Petroleum 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.
Operating environment
Commending Mr. Dangote for this transformation, Chairman of IPPG/Waltersmith Refinery & Petrochemicals Co. Ltd, Abdulrazaq Isa, called on the government to support domestic refiners by ensuring the availability of crude, adhering to domestic crude supply obligations, and implementing effective pricing and monitoring measures to prevent smuggling.
Chairman of CORAN’s Board of Trustees and CEO of Integrated Oil & Gas, Emmanuel Iheanacho, remarked that the Dangote Oil Refinery has set a high standard by producing Euro-V products, thus protecting citizens from exposure to high-sulphur products.
He noted that transforming Nigeria into a net exporter will bring numerous benefits but reiterated the need for increased investment to boost crude production, lamenting that Nigeria loses approximately $83 billion annually by not meeting its OPEC quota.
The Chairman, Major Energies Marketers Association of Nigeria (MEMAN), Huub Stokman, said that Nigeria is on the verge of becoming Africa’s refining powerhouse, which will significantly boost its economy.
The Chairman of CORAN, Momoh Oyarekhua, also expressed concern over challenges related to crude supply and stated that domestic refiners will work with regulators and stakeholders to address these issues.
The Minister of State for Petroleum Resources (Oil), Heineken Lopkobiri, assured that the government would continue to refine frameworks to enhance crude production and support domestic refineries.
His counterpart from the Ministry of Industry, Trade and Investment, Doris Uzoka-Anite, emphasised the Tinubu-led administration’s commitment to ensuring value addition for mineral resources before export.
