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Speaking at a summit hosted by the Crude Oil Refinery Owners Association of Nigeria in Lagos, he lamented that while nations like Norway are investing oil revenues into future funds through their national wealth funds, Nigeria and other African countries are currently depleting future oil revenues.
“To ensure a steady supply of feedstock, we must stop mortgaging our crude. It is regrettable that while countries like Norway are channeling oil proceeds into future funds, we in Africa are spending future oil revenues today,” he remarked.
The Nigerian National Petroleum Company Limited had committed to 272,500 barrels per day of crude oil through various crude-for-loan agreements totaling $8.86 billion. This commitment implies that approximately 8.17 million barrels of crude would be allocated monthly for these loan arrangements, as indicated by an analysis from the Nigeria Extractive Industries Transparency Initiative and the NNPC’s financial reports.
During the event, Dangote, represented by Group Executive Director Mansur Ahmed, stressed the importance of prioritizing the domestic crude supply obligation. “We must also focus on implementing the domestic crude supply obligation and enhance crude production capacity to meet refinery demand,” he stated.
He further noted that the Dangote refinery, with a capacity of 650,000 barrels per day, was constructed without any government incentives.
The Dangote refinery was constructed without any government incentives. However, to realize the goal of establishing Nigeria as a refining center for the region, it is essential to provide incentives for investors, he emphasized.
Dangote noted that in the next three years, new refining capacity totaling 1.8 million barrels will be introduced in Kuwait, China, and Bahrain.
Conversely, he pointed out that Europe is tightening its environmental regulations, with Holland and Belgium prohibiting the export of low-quality petroleum products from their ports, which previously were sent to Africa.
Citing a report, Dangote indicated that numerous refineries in Europe and China, with a combined capacity of 3.6 million barrels per day, are expected to close in the coming years.
He remarked, “Recent news highlighted that Scotland’s only refinery is set to shut down next year. Additionally, Shell is transforming its 7.5 million tonnes per annum refinery in Germany into a lubricating oil facility.
“There are significant opportunities available. Africa currently imports around 3 million barrels per day of petroleum products, with approximately half of this volume coming from coastal nations ranging from Senegal to South Africa.
“Interestingly, these countries produce over 3.4 million barrels of crude oil daily, underscoring the issue of having excess crude production capacity without corresponding refining capabilities. The imports are sourced from Europe, Russia, and other regions.
“To seize this opportunity, we will need to establish an additional refining capacity of 1.5 million barrels per day. Achieving this will be challenging and will require robust government support and collaboration among stakeholders.”
This announcement coincided with the Federal Government's designation of the Dangote refinery as the exclusive supplier of jet fuel, or Jet A1, for Nigerian airline operators. This information was shared by the Minister of Aviation, Festus Keyamo, during an interview with Channels TV on Tuesday.
The airline operators convened recently, and with my approval, they have decided to exclusively procure Jet A1 fuel from Dangote refinery, according to Keyamo.
He noted, "As of yesterday, we initiated the naira-for-crude transaction with Dangote, which is entirely in naira without any dollar involvement."
Keyamo elaborated that obtaining jet fuel from Dangote would shield airline operators from the fluctuations in global oil prices, thereby reducing their operational costs.