Besides, the
organisation expressed a belief that the success of Dangote Refinery project
could incentivise the rise of similar projects across Africa despite the
current focus on energy transition.
The Secretary-General,
African Petroleum Producers Organisation, Dr. Omar Farouk Ibrahim, said in an
interview that Dangote Refinery shall be supplying over 12% of Africa’s
products demand when it becomes operational.
Ibrahim stated, “To appreciate the impact
that the Dangote refinery is going to have on African economies and especially
on the supply of petroleum products, and to some extent the conservation of
scarce foreign exchange, a look at some statistics on the continent’s petroleum
products demand and supply is in order.
“Currently, Africa’s daily petroleum demand
is 4.3 million barrels per day (mbd). Of this volume, 57% is produced locally
(on the continent) while 43% is imported. When Dangote is fully onstream, the
percentage of Africa’s products import shall drop to 36%. This is even as the
total volume of products demand rises to 5.4 mbd. You can therefore see the
huge impact that Dangote refinery shall be making to overall products supply in
Africa. Dangote shall be supplying over 12% of Africa’s products demand.
“That is huge savings for a continent that
has scarce foreign exchange and little to export. We shall save from buying
abroad and from shipping and insurance costs. Furthermore, the success of
Dangote could incentivise the rise of similar projects, the noise about energy
transition notwithstanding,” oil analyst noted.
Ibrahim also hailed Dangote’s decision to
go ahead with the construction of crude oil refinery despite a campaign against
fossil fuels, adding that the demand for fossil fuel is going to continue for
several decades to come.
“We believe that Dangote made a very wise
decision to proceed with the project, despite the campaign against fossil
fuels. There will be demand for petroleum products for many decades to come.
Indeed, we see petroleum products prices rising steadily in the next few years
for at least two decades.
“This is because new refineries are not
coming up in Europe and North America, where Africa imports 34% of its
supplies, because their governments have embraced energy transition, some
willingly, others due to pressure. So, some of the sources of Africa’s imports
are going to dry up. At the same time, Africa will not be in a position to fast
track the development of non-fossil fuels.
“In fact, even the developed countries will
not be able to move as fast as is projected. We see Africa and many regions of
the world continuing to rely on fossil fuel energy at a time when deliberate
decisions are being made to stop funding fossil fuel projects. The world risks
abandoning fossil for renewable, but in the end not getting the renewables, and
at the same time losing the fossils due to deliberate neglect”, he explained.
Ibrahim urged African refiners to invest
more on technology and develop the right expertise to manage their refineries,
which are going to serve the continent as western refiners halt the
establishment of more refineries.
He stated, “African refiners have no cause
to worry about their investments. All they need to do is to ensure that they
have developed the right expertise to manage their refineries, get honest
managers and staff to run their business and come together to join APPO’s
initiative to establish foundries and other equipment manufacturing plants to
service their refineries. Once they have these, the market is there for their
products.
“For the next three decades or more, Africa
shall continue to use fossil fuel-driven vehicles and with its population
projected to double within that period, there will be a huge market for
petroleum products. Africa cannot rapidly transit into electric vehicles, as the
bulk of the vehicles on our roads today and in the next 20-30 years are going
to be non-electric. There is the market, and we should not be discouraged from
thinking positively”, the APPO scribe noted.
He disclosed that APPO is working with its
Member Countries to construct cross border energy infrastructure like pipelines
for crude and products as well as for oil and gas terminals, depots etc.
“Once we have this infrastructure on the
ground, the markets for African refiners shall not be limited to their home
countries. Fortuitously, the African Continental Free Trade Agreement, which
came into force in 2021, is there to support this initiative”, he added.