BY FESTUS OKOROMADU
It’s no longer news that Nigeria is the only member of the global oil cartel, Organization of Petroleum Exporting Countries that imports refined petroleum products, nor is it news that the country spent over N12 trillion subsidizing the import of petrol in the last three years.
In short, one of the most critical challenges the president-elect, Bola Tinubu, will have on his table on assumption of office on May 29, 2023 is the issue of subsidy removal.
But it does appear that succour is here, at least a reduction in the subsidy payment, as the much awaited 650,000 barrel per day production capacity refinery of the Dangote Group commences operation today.
President Muhammadu Buhari is set to add another feather to his cap as he gets set to retire from government with the commissioning of the Dangote Refinery and Petrochemical Complex today.
Nigerians both in the public and private sector seem to have reasons to applaud the much expected kick -off of the perceived source of rescue from the danger posed by the imminent petrol subsidy removal next month.
Almost every stakeholder in the Nigerian economy acknowledges that the Dangote Refinery is a worthy venture for all.
For instance, the Lagos Chamber of Commerce and Industry is of the opinion that the Dangote Refinery presents the country as an investment destination for both local and foreign investors.
The Director General, LCCI, Dr. Chinyere Almona, in a statement said the refinery will save and generate foreign exchange, create jobs, affect the value of the Naira positively, create prosperity as well as business opportunities among others.
The statement reads in part: “LCCI views the refinery’s impact on the Nigerian economy as significant. It will save and generate foreign exchange. The refinery will create jobs, positively affect the value of the Naira, broaden prosperity for the downstream sector, and provide growth opportunities for businesses. It will also stimulate economic growth by impacting the country’s balance of payments.
“In addition, the Chamber expects the refinery to fuel further growth and development across its value chain, including cosmetics, plastics, textiles, etc. We also see room for the development of added value in agribusiness, including the sugar backward integration projects that plan to create a strong localized supply in the sugar industry, benefiting local suppliers across the sugar value chain.
“Finally, the chamber notes that this initiative presents Nigeria as an attractive investment destination for local and foreign investors.’’
Similarly, the Nigeria Employers ‘Consultative Association and Manufacturers’ Association of Nigeria are very optimistic that the refinery could be the industrial renaissance the nation urgently needs.
The Director-General, NECA, Wale-Smatt Oyerinde, in a statement, said the commissioning of the refinery will immediately address employment, insecurity, poverty and other negative issues facing the economy.
“With the unemployment rate hovering over 40 percent, high insecurity, the low purchasing power of Nigerians and the nation facing other multi-dimensional challenges, the planned commissioning of Dangote Refinery is succour to a nation in dire need of an industrial renaissance.
“With the petroleum Refinery and Petrochemical plant as well as the Fertilizer plant housed in Nigeria, it invariably implies that there would be no more importation of petroleum products; rather, there will be export of finished products, availability of petroleum products, thus, putting an end to long queues and scarcity of petroleum products. A significant plus of this feat would be the attraction of foreign capital investments that the country desperately needs.
‘‘In addition, it would lead to skills transfer and technology acquisition opportunities with beneficial impacts on the downstream sector,” he said.
Evaluating the economic importance of the Dangote Refinery to the country, Director General, Manufacturers’ Association of Nigeria, Segun Ajayi-Kadir, said the refinery will provide the highest job opportunities in the country.
“On employment, the refinery offers the highest number of employees by any private company, including 100,000 indirect employment at retail outlets; 26,716 filling stations and 129 depots in Nigeria.
“Quite interestingly, the16,000 trucks for transport will create additional jobs and, in the process, the company has trained over 400 artisans selected from host communities in the areas of Masonry, Carpentry, AC Electricians, Plumbing, Welders, Iron-benders and Auto Mechanics,” Ajayi-Kadir said.
“The refinery will create jobs, positively affect the value of the Naira, broaden prosperity for the downstream sector, and provide growth opportunities for businesses. It will also stimulate economic growth by impacting the country’s balance of payments”
Prior to the commissioning ceremony, the Dangote Refinery Complex had become a Mecca of some sort as almost every eminent personality in the public space had come to see things for themselves.
Late last year, the complex hosted the governor of Lagos State, Babajide Sanwo-Olu who commended Aliko Dangote for setting up the Refinery in the state.
He described the investment as one that will bring further development to the state and the country in general.
Sanwo-Olu noted that the Dangote Refinery and Fertilizer Complex have positioned the Epe and Lekki axis of Lagos as an industrial hub.
He said the Refinery and Fertilizer Plants would meet the yearnings of Nigerians, and also bring exciting times for the government.
He commended Dangote for taking into account gender inclusion and securing the future of the youths in the host communities.
The Governor of the Central Bank of Nigeria, Godwin Emefiele, also paid homage to the complex last year.
Speaking of the economic importance of the complex after the tour of the facilities, Emefiele said that arrangement is being made to enable the Dangote Refinery sell refined crude to Nigeria in naira when it commences production.
He noted that the $15 billion projects would save the nation from expending about 41 per cent of its foreign exchange on importation of petroleum products.
His words: “Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians use in naira.”
Emefiele is also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.
“This will make the price of our petroleum products cheaper in naira. If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.
“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Emefiele said.
The Minister of Information and Culture, Lai Mohammed, also led a team of media personalities on tour of the complex.
Addressing journalist after the factory tour, the Minister listed the benefits of the Refinery to include huge value addition that will contribute to increase in Nigeria’s Gross Domestic Product; conservation of foreign exchange as importation of petroleum products would be eradicated; generation of forex through export of finished product; availability of petroleum products thus ending petrol queues, and attraction of foreign capital investment.
He stated, “After visiting the facilities, one can conveniently say that Dangote is leading Nigeria’s industrial revolution. The coming into being of such huge industrial complexes as the Dangote Fertilizer Company and the Refinery were made possible by the enabling environment provided by the administration of President Muhammadu Buhari.
“Today, businesses are springing up in all sectors, thanks to a conducive business environment. Under this administration, the Presidential Enabling Business Environment Council (PEBEC) has implemented over 150 reforms, moving Nigeria up 39 places on the World Bank Doing Business index since 2016. Mr. President also signed the Companies and Allied Matters Act, 2020 (CAMA 2020) – Nigeria’s most significant business legislation in three decades.
“The result of this favourable business environment is the birth of new businesses such as the $2.5 billion Dangote Fertiliser Plant that will produce 3 million metric tonnes of Urea every year; the 650,000 barrels-per-day oil refinery due to open later this year; Lekki Deep Sea Port, one of the most modern sea ports in West Africa,” Mohammed said.
At least five presidents are expected to grace the commissioning today.
The ceremony is expected to attract serving and former governors, top government officials, captains of industries, among others.
All you need to know about Dangote Refinery
• The refinery covers a land area of approximately 2,635 hectares, which is about six times the size of Victoria Island in Lagos.
• The cost of completion is pegged at $19bn.
• The Dangote Oil Refinery is expected to produce 650,000 barrels per day (BPD) integrated refinery project, reputed as Africa’s biggest oil refinery and the world’s biggest single-train facility.
• A single-train refinery uses an integrated distillation unit or one crude distillation unit to refine crude oil into various petroleum products, as against the use of multiple distillation units by most big refineries.
• The pipeline infrastructure at the Dangote Petroleum Refinery is the largest anywhere in the world, with 1,100 kilometers to handle 3 billion Standard Cubic Foot of gas per day.
• The refinery alone has a 435MW power plant that is able to meet the total power requirement of Ibadan DisCo, covering five states, including Oyo, Ogun, Osun, Kwara and Ekiti.
• The refinery will meet 100 per cent of the Nigerian requirement of all refined products and also have a surplus of each of these products for export. It is designed to process Nigerian crude with the ability to also process other crudes.
• Diesel and gasoline products from the refinery will conform to Euro V specifications
• The refinery design complies with World Bank, US EPA, European emission norms and the Department of Petroleum Resources (DPR) emission/effluent norms.
• At full production, the complex will have an annual refining capacity of 10.4 million tonnes of gasoline, in addition to 4.6MT of diesel and 4MT of jet fuel.
• It will also produce 0.69Mt of polypropylene, 0.24MT of propane, 32,000T of sulphur and 0.5MT of carbon black feed.
• The refinery also includes a 440-million-litre water treatment tank farm and a housing estate built for 50,000 staff and their families on site.
• The refinery would create a market for $1 billion per annum of Nigerian crude and foreign exchange savings/earnings of $9.9bn.
• The complex also includes a fertiliser plant, which uses by-products from the refinery as raw materials.
• The project is expected to generate 4,000 direct and 145,000 indirect jobs.
• The Dangote Oil Refinery is being funded with $3bn equity and $6bn loan capital. A consortium of local and international banks led by the Standard Chartered Bank provided a $3.3bn loan facility.
• The African Finance Corporation (AFC), the African Development Bank, (AfDB), the African Export-Import Bank (Afreximbank), among others, also provided financial support.
• The United States Trade and Development Agency offered a N251.3bn ($0.997m) training grant to develop human resources for operating the refinery.
• It trained 900 young engineers in refinery operations outside the country, six mechanical engineers at GE University in Italy. Fifty process engineers were also trained by Honeywell/UOP for six months, as well as 50 management trainees for succession.
