Canada #66
Nigeria's Richest Man Confronts "Oil Mafia" With New $20B Refinery
By Alex Kimani of OilPrice.com Thursday, Nov 21, 2024
Two months ago, Nigeria’s beleaguered energy sector witnessed a very significant event: the Dangote Oil Refinery began producing gasoline and selling it domestically to Nigeria's state oil firm, Nigerian National Petroleum Company (NNPC), marking the first time in decades Africa’s largest oil producer is refining its own crude. The state-of-the-art $20 billion refinery was launched in January 2024, but only began producing gasoline in September, expected to reach full operations in November. The giant refinery has a capacity to process 650,000 barrels of crude per day, more than enough for the country’s needs. To sweeten the deal further, the facility is buying crude and selling refined fuels in Nigeria in the local currency, saving the country’s much-needed foreign exchange, especially the US dollar.
Unfortunately for Aliko Dangote, Africa’s second richest man and owner of the refinery, his bold move has put him on a collision course with what he refers to as Nigeria's ‘oil mafia’.
"I knew there would be a fight. But I didn’t know that the mafia in oil, they are stronger than the mafia in drugs," Mr Dangote told an investment conference in June.
"They don’t want the trade to stop. It’s a cartel. Dangote comes along and he’s going to disrupt them entirely. Their business is at risk,” says Mr Emmanuel, a Nigerian oil expert.
According to the BBC, since oil was discovered in the West African nation in 1956, the country’s downstream sector has largely been a cesspit of shady deals with little accountability by the NNPC. For decades, Nigeria has been producing and exporting its crude which is then refined abroad. NNPC swaps Nigeria’s crude oil for refined products, including petrol, which are shipped back home. Incredibly, it only started publishing its accounts five years ago, despite the fact that oil revenue accounts for nearly 90% of Nigeria’s export earnings. In other words, until recently, only thPost too long. Click here to view the full text.
