Dangote Refinery challenges global narrative


It started like a grudge match. Africa’s richest man, Aliko Dangote, was dealt a bad hand in a failed transaction. Later, he vowed revenge. Not in a pound of flesh, but by venturing to make his own success where he had been ambushed.

At issue was the decision of the government of Umaru Musa Yar’Adua in 2007 to reverse the sale of the Port Harcourt and Kaduna Refineries (two of Nigeria’s moribund refineries) to Blue Star, the Dangote-led consortium.

Blue Star had paid about $670 million for the plants in the twilight of the Obasanjo administration, and gone away thinking it was a done deal. It wasn’t.

Related News
So, what happened to Buhari?
EKWEREMADU: End of the road?
The Igbo and Homecoming
Even though the refineries were producing at about 20 per cent of their capacity at the time of sale, the Yar’Adua government, egged on by Labour, insisted the “national patrimony” were under-valued and under-priced. The sale was reversed.


Dangote walked away bruised, but unbowed. Six years later he announced plans to build a private refinery in Lagos with a capacity of 650,000 bpd – over 200,000 bpd more than the installed capacity of Nigeria’s four refineries combined.

Crazy at first

It sounded like a crazy idea. So crazy, Nigeria’s Central Bank Governor, Godwin Emefiele, said on Tuesday that on account of it, the U.S. lender JP Morgan threatened to expel Nigeria from its Government Bond Index for Emerging Markets.

After unforeseen delays, including cost reviews (from the original $12-$14 billion to $19 billion) not to mention energy transition concerns, the glut in global supply caused by COVID-19 and spooky markets caused by the Russia-Ukraine war, the refinery is now set for official commissioning on May 22.

One source told me on Monday that perhaps the most significant recent reason for the delay was the need to sychronise power supply to the Fluid Catalytic Cracking Unit, FCCU, which has now been significantly completed by General Electric.


Apart from an estimated 250,000 direct and indirect jobs that the refinery would create, the refinery is also expected to spin off other business opportunities, a story that Dangote loves to share in a country with 33 per cent unemployment.

S&P Global reported two months ago that early commencement of the Dangote Refinery would not only benefit Nigeria, but could also benefit Africa currently suffering a shortage of diesel as a result of the closure of three of five refineries in South Africa.

The continent imports about 700,000 bpd of diesel. Diesel is one of the four quality Euro-V products expected from Dangote Refinery. Others are gasoline, jet fuel and polypropylene.

But how does Africa’s richest man propose to deal with the growing resonance of the global green army?

He was once outspoken on global warming and its predations. At a fundraiser hosted by the Lagos State government for victims of a major flood disaster in 2011, Dangote said: “All over the world, nature is reacting. We are having extreme weather conditions…as managers of the city, our responsibility is to share knowledge with our people to prepare for the worst and hope for the best.”

That was before he started building his refinery. For Nigeria and much of Africa, where energy resources, renewable and otherwise, remain considerably under-utilised, the choice seems to swing between managing emissions, already among the lowest in the world, and expanding industrial processes required to meet rising energy demand.

Green army

Dangote Group said it was not in denial of the dilemma it faces from green campaigners. The Group Executive Director, Strategy, Capital Projects and Portfolio Development, Devakumar G. Edwin, said five years ago that the group was dedicated to producing “efficient and clean fuels by investing in processes that meet European standards of gasoline.”

Edwin tracked back to why the refinery was started. “Primarily,” he said, “Nigeria exports raw materials and imports finished products. When you import the finished product back, you are essentially importing poverty into the country.

”We have always focused on import substitution. It’s what we are doing in sugar and what we’ve done in cement. So, we decided to adopt the same strategy for petroleum refining.”

Apart from the economic implications, an NGO, Stakeholder Democracy Network, reported on its website that the quality of the stock of imported fuel could also potentially undermine air toxicity, and cause other environmental problems.

Yet, the Energy Transition Plan, ETP, a green playbook by the government to achieve carbon neutrality by 2060, is an indication that Nigeria recognises the urgency of sustainable carbon footprint.

The ETP comes on the heels of the Petroleum Industry Act, finally ratified in 2021. The law is supposed to introduce stability, transparency and accountability to an industry that has long resisted reform.

The ETP anticipates a scenario in which increased investment in the sector would lead to an uptake in the use of gas as a “transition fuel” and also help accelerate the move toward decarbonisation.

The divergence of opinions surrounding what methods to implement and what outcomes to project has in some way come to define the conversation on sustainability, with a number of developing countries even canvassing such ideas as “energy justice!”


Large industrial projects like Dangote Refinery, which covers 2,635 hectares, are infamous for environmental challenges they present to the local ecosystem, often causing long-term damage and increased risk of displacement. Already, local populations have called attention to the disruptive effects of the refinery to the environment and their livelihood.

Hobson’s choice

The continent faces what could well be Hobson’s choice: how to overcome widespread energy poverty while at the same time not ignoring global concerns about the deleterious effects of converting its rich deposits of hydrocarbon resources. Nigeria, like many commodity-rich countries on the continent, is at a crossroads. Is there a bridge?

Maybe. And Africa’s richest man is poised not only to fill a vital supply gap but also to do so as a business, keenly aware of all the bad habits that ruined the state refineries. Reuters quoted him as saying he was focused on starting production at the end of the third quarter of 2022 and to reach full capacity by early 2023 – a dream now deferred.

Dangote Refinery is not Nigeria’s first experience in private refining. To plug the supply gap, previous governments issued dozens of licences for “modular refineries.”

As a result of price caps and other regulatory hassles, however, only two of them with a combined capacity of 10,000 bpd are currently producing. Yet their combined output, even with those of rogue refineries that dot the oil-rich Niger Delta region, still fall far short of the estimated daily consumption of 72 million litres daily, an estimate still viewed with suspicion in some circles.

One and a half decades after Dangote’s Blue Star misery, the mood in official circles has changed. In 2021, government gave state oil firm, NNPC Limited, approval to buy a 20 per cent stake valued at $2.76 billion in Dangote Refinery, indicating a significant shift in government attitude.

Dangote told The Economist that the refinery would save Nigeria up to $10 billion in foreign exchange and generate approximately $10 billion in exports. The country’s perennially opaque petrol demand and supply chain could also be re-written. While the location of the Refinery could bring benefits of lower freighting costs, pump prices would still be largely determined by the markets.

Nigeria imports 80-90 per cent of all domestically consumed petroleum products. According to the Observatory of Economic Complexity, OEC, Nigeria imported $11.3 billion in refined petroleum products in 2021, becoming the 18th largest importer of the products in the world, while refined petroleum was the first most imported product in Nigeria.


https://www.vanguardngr.com/2023/05/dangote-refinery-challenges-global-narrative/

Long live dangote, if only we have like 5 Dangote's in Nigeria

richmond500:
Long live dangote, if only we have like 5 Dangote's in Nigeria

I no understand why some people dey always beef the man

Parachoko:
I no understand why some people dey always beef the man

Poverty has a way of making people blame others.
Nigerian govt refuse to fix the country refinery for years, Dangote now wants to do the job of building a refinery for us and they are accusing him of Monopoly, like he was the one that told the govt not to fix the country's refinery.

Today, we no get electricity, if he decide to invest in power, they will call him monopolist again.

Parachoko:
I no understand why some people dey always beef the man

Only Igbos are beefing him.

fuckuigbos:
Only Igbos are beefing him.

I totally disagree with you.Dangote has a lot of competitors in the cement,sugar, Construction,house hold etc industries and so naturally he must have enemies and people beefing him. Remember his legendary battle with his northern brother of BUA cement and sugar( that one too na igbo ?)..

Moving forward it is an open secret that FG favors Dangote. That is why he is regarded in local parlance as "Federal pikin". Waivers,Reduced taxes, Tax rebates Federal patronage etc.

Back to the main article. Why would Federal Govt buy shares of over $2 billion from a private individual when they have 4 refineries lying prone?...My thinking goes this way : I have four businesses that iam not managing well, then I go ahead and withdraw $2 billion dollars from those businesses to invest in a competitors business. Why not resuscitate your business instead of empowering a competitor ?

richmond500:
Poverty has a way of making people blame others.
Nigerian govt refuse to fix the country refinery for years, Dangote now wants to do the job of building a refinery for us and they are accusing him of Monopoly, like he was the one that told the govt not to fix the country's refinery.

Today, we no get electricity, if he decide to invest in power, they will call him monopolist again.

The funny thing about this is that, it was not only Dangote that was giving license by the FG

maxxx:


Moving forward it is an open secret that FG favors Dangote. That is why he is regarded in local parlance as "Federal pikin". Waivers,Reduced taxes, Tax rebates Federal patronage etc.

No b only Dangote dey enjoy all this things you listed up there

maxxx:


I totally disagree with you.Dangote has a lot of competitors in the cement,sugar, Construction,house hold etc industries and so naturally he must have enemies and people beefing him. Remember his legendary battle with his northern brother of BUA cement and sugar( that one too na igbo ?)..

Moving forward it is an open secret that FG favors Dangote. That is why he is regarded in local parlance as "Federal pikin". Waivers,Reduced taxes, Tax rebates Federal patronage etc.

Back to the main article. Why would Federal Govt buy shares of over $2 billion from a private individual when they have 4 refineries lying prone?...My thinking goes this way : I have four businesses that iam not managing well, then I go ahead and withdraw $2 billion dollars from those businesses to invest in a competitors business. Why not resuscitate your business instead of empowering a competitor ?

They always like to mention Igbo in every discussion. It's now a habit

Parachoko:
No b only Dangote dey enjoy all this things you listed up there

Many other companies enjoys this.
Recently they waived some cash from air peace.
But Na only Dangote they see.

Let's stop all these unnecessary narratives.
The idea to build Africas largest Refinery came from his India partners.
They only use his name because he's big in Africa already and he understands the terrain better.
60% of that Refinery is owned by Indians and it's not close to completion.

The only reason they beef am is because his from the North, not SE!

You will never see them insult or castigate any of Allen Onyeama/Air peace articles, as if we don't know how most of Niger Delta elites bankrolled the airline during GEJ time and made him a ceremonial figure head

Parachoko:
I no understand why some people dey always beef the man

fuckuigbos:
Only Igbos are beefing him.

When I learnt that Obasanjo issued 18 licenses for private refineries and none of those who got the license could secure capital to build the refineries. I hail Dangote

Parachoko:
I no understand why some people dey always beef the man

Start observing those people beefing him.They come from one section of the country.
They are otherwise known as children of hate!
Start monitoring their comments on social media on any issue that has to do with dangote

ItsTutsi:
The only reason they beef am is because his from the North, not SE!

You will never see them insult or castigate any of Allen Onyeama/Air peace articles, as if we don't know how most of Niger Delta elites bankrolled the airline during GEJ time and made him a ceremonial figure head

Igbo believe Dangote was enriched by Northern oligarchy government.

And not as if they hate injustice ooo,they just wish they are the one in position of hausa/fulani today

Parachoko:
Dangote Refinery challenges global narrative


It started like a grudge match. Africa’s richest man, Aliko Dangote, was dealt a bad hand in a failed transaction. Later, he vowed revenge. Not in a pound of flesh, but by venturing to make his own success where he had been ambushed.

At issue was the decision of the government of Umaru Musa Yar’Adua in 2007 to reverse the sale of the Port Harcourt and Kaduna Refineries (two of Nigeria’s moribund refineries) to Blue Star, the Dangote-led consortium.

Blue Star had paid about $670 million for the plants in the twilight of the Obasanjo administration, and gone away thinking it was a done deal. It wasn’t.

Related News
So, what happened to Buhari?
EKWEREMADU: End of the road?
The Igbo and Homecoming
Even though the refineries were producing at about 20 per cent of their capacity at the time of sale, the Yar’Adua government, egged on by Labour, insisted the “national patrimony” were under-valued and under-priced. The sale was reversed.


Dangote walked away bruised, but unbowed. Six years later he announced plans to build a private refinery in Lagos with a capacity of 650,000 bpd – over 200,000 bpd more than the installed capacity of Nigeria’s four refineries combined.

Crazy at first

It sounded like a crazy idea. So crazy, Nigeria’s Central Bank Governor, Godwin Emefiele, said on Tuesday that on account of it, the U.S. lender JP Morgan threatened to expel Nigeria from its Government Bond Index for Emerging Markets.

After unforeseen delays, including cost reviews (from the original $12-$14 billion to $19 billion) not to mention energy transition concerns, the glut in global supply caused by COVID-19 and spooky markets caused by the Russia-Ukraine war, the refinery is now set for official commissioning on May 22.

One source told me on Monday that perhaps the most significant recent reason for the delay was the need to sychronise power supply to the Fluid Catalytic Cracking Unit, FCCU, which has now been significantly completed by General Electric.


Apart from an estimated 250,000 direct and indirect jobs that the refinery would create, the refinery is also expected to spin off other business opportunities, a story that Dangote loves to share in a country with 33 per cent unemployment.

S&P Global reported two months ago that early commencement of the Dangote Refinery would not only benefit Nigeria, but could also benefit Africa currently suffering a shortage of diesel as a result of the closure of three of five refineries in South Africa.

The continent imports about 700,000 bpd of diesel. Diesel is one of the four quality Euro-V products expected from Dangote Refinery. Others are gasoline, jet fuel and polypropylene.

But how does Africa’s richest man propose to deal with the growing resonance of the global green army?

He was once outspoken on global warming and its predations. At a fundraiser hosted by the Lagos State government for victims of a major flood disaster in 2011, Dangote said: “All over the world, nature is reacting. We are having extreme weather conditions…as managers of the city, our responsibility is to share knowledge with our people to prepare for the worst and hope for the best.”

That was before he started building his refinery. For Nigeria and much of Africa, where energy resources, renewable and otherwise, remain considerably under-utilised, the choice seems to swing between managing emissions, already among the lowest in the world, and expanding industrial processes required to meet rising energy demand.

Green army

Dangote Group said it was not in denial of the dilemma it faces from green campaigners. The Group Executive Director, Strategy, Capital Projects and Portfolio Development, Devakumar G. Edwin, said five years ago that the group was dedicated to producing “efficient and clean fuels by investing in processes that meet European standards of gasoline.”

Edwin tracked back to why the refinery was started. “Primarily,” he said, “Nigeria exports raw materials and imports finished products. When you import the finished product back, you are essentially importing poverty into the country.

”We have always focused on import substitution. It’s what we are doing in sugar and what we’ve done in cement. So, we decided to adopt the same strategy for petroleum refining.”

Apart from the economic implications, an NGO, Stakeholder Democracy Network, reported on its website that the quality of the stock of imported fuel could also potentially undermine air toxicity, and cause other environmental problems.

Yet, the Energy Transition Plan, ETP, a green playbook by the government to achieve carbon neutrality by 2060, is an indication that Nigeria recognises the urgency of sustainable carbon footprint.

The ETP comes on the heels of the Petroleum Industry Act, finally ratified in 2021. The law is supposed to introduce stability, transparency and accountability to an industry that has long resisted reform.

The ETP anticipates a scenario in which increased investment in the sector would lead to an uptake in the use of gas as a “transition fuel” and also help accelerate the move toward decarbonisation.

The divergence of opinions surrounding what methods to implement and what outcomes to project has in some way come to define the conversation on sustainability, with a number of developing countries even canvassing such ideas as “energy justice!”


Large industrial projects like Dangote Refinery, which covers 2,635 hectares, are infamous for environmental challenges they present to the local ecosystem, often causing long-term damage and increased risk of displacement. Already, local populations have called attention to the disruptive effects of the refinery to the environment and their livelihood.

Hobson’s choice

The continent faces what could well be Hobson’s choice: how to overcome widespread energy poverty while at the same time not ignoring global concerns about the deleterious effects of converting its rich deposits of hydrocarbon resources. Nigeria, like many commodity-rich countries on the continent, is at a crossroads. Is there a bridge?

Maybe. And Africa’s richest man is poised not only to fill a vital supply gap but also to do so as a business, keenly aware of all the bad habits that ruined the state refineries. Reuters quoted him as saying he was focused on starting production at the end of the third quarter of 2022 and to reach full capacity by early 2023 – a dream now deferred.

Dangote Refinery is not Nigeria’s first experience in private refining. To plug the supply gap, previous governments issued dozens of licences for “modular refineries.”

As a result of price caps and other regulatory hassles, however, only two of them with a combined capacity of 10,000 bpd are currently producing. Yet their combined output, even with those of rogue refineries that dot the oil-rich Niger Delta region, still fall far short of the estimated daily consumption of 72 million litres daily, an estimate still viewed with suspicion in some circles.

One and a half decades after Dangote’s Blue Star misery, the mood in official circles has changed. In 2021, government gave state oil firm, NNPC Limited, approval to buy a 20 per cent stake valued at $2.76 billion in Dangote Refinery, indicating a significant shift in government attitude.

Dangote told The Economist that the refinery would save Nigeria up to $10 billion in foreign exchange and generate approximately $10 billion in exports. The country’s perennially opaque petrol demand and supply chain could also be re-written. While the location of the Refinery could bring benefits of lower freighting costs, pump prices would still be largely determined by the markets.

Nigeria imports 80-90 per cent of all domestically consumed petroleum products. According to the Observatory of Economic Complexity, OEC, Nigeria imported $11.3 billion in refined petroleum products in 2021, becoming the 18th largest importer of the products in the world, while refined petroleum was the first most imported product in Nigeria.


https://www.vanguardngr.com/2023/05/dangote-refinery-challenges-global-narrative/

EuroV diesel wow

Basic123:

Igbo believe Dangote was enriched by Northern oligarchy government.

And not as if they hate injustice ooo,they just wish they are the one in position of hausa/fulani today

Guy make una relax, the energy wey una dey put into hate of tribes would have amounted to something more positive in channelled the right way

erico2k2:

Guy make una relax, the energy wey una dey put into hate of tribes would have amounted to something more positive in channelled the right way

I am doing well.
Very positive.


This is not affecting my growth in anyway. I will stop,the day the other camp stops attacking my tribe on this platform

Basic123:

I am doing well.
Very positive.


This is not affecting my growth in anyway. I will stop,the day the other camp stops attacking my tribe on this platform

I never meant you aint doing well, Im just saying the energy invested in tribal hate would have propelled you 4ward positively and not just you,Im talking bout the whole school of though

erico2k2:

I never meant you aint doing well, Im just saying the energy invested in tribal hate would have propelled you 4ward positively and not just you,Im talking bout the whole school of though

How are you so sure I am not better off than you imagined?
I am proud to be Tribal warlord.Attack my tribe,I will give you gbas gbos and I am proud of that .
Its okay?
Have a nice night

Basic123:

How are you so sure I am not better off than you imagined?
I am proud to be Tribal warlord.Attack my tribe,I will give you gbas gbos and I am proud of that .
Its okay?
Have a nice night

Attack your tribe ke who tribe hep.I do nt have Energy for such kiddy stuff,I deal with how to make more money and better myself who get time for all that kind yeye talk

erico2k2:

Attack your tribe ke who tribe hep.I do nt have Energy for such kiddy stuff,I deal with how to make more money and better myself who get time for all that kind yeye talk

I Deal with both 😆
I make money,
I defend my Tribe and also make money. One is not disturbing the other.it helps me

Take good care of yourself

maxxx:


I totally disagree with you.Dangote has a lot of competitors in the cement,sugar, Construction,house hold etc industries and so naturally he must have enemies and people beefing him. Remember his legendary battle with his northern brother of BUA cement and sugar( that one too na igbo ?)..

Moving forward it is an open secret that FG favors Dangote. That is why he is regarded in local parlance as "Federal pikin". Waivers,Reduced taxes, Tax rebates Federal patronage etc.

Back to the main article. Why would Federal Govt buy shares of over $2 billion from a private individual when they have 4 refineries lying prone?...My thinking goes this way : I have four businesses that iam not managing well, then I go ahead and withdraw $2 billion dollars from those businesses to invest in a competitors business. Why not resuscitate your business instead of empowering a competitor ?

PH refinery is being renovated as we speak. I'm not talking of TAM

sixtuso:
They always like to mention Igbo in every discussion. It's now a habit

Its called Tit for Tat
When igbos were busy (in the name of opposition to government of Apc and buhari) making enemies of everybody, calling everybody names and insulting the elders and leaders of other tribes it never occurred to them that others too would wake up one day and returned the favour.

What goes around comes around. I