Africa’s wealthiest man, Aliko Dangote, has announced his willingness to transfer ownership of his multibillion-dollar oil refinery to the state-owned energy company, NNPC Limited.
This declaration comes amidst an escalating dispute with a key equity partner and ongoing conflicts with regulatory authorities in Nigeria.
The 650,000 barrel-per-day refinery, which began operations last year after a decade of construction delays, cost $19 billion—more than double the initial estimate. The refinery is expected to reduce Nigeria’s dependency on imported fuel and save up to 30% of the foreign exchange spent on imports.
“Let them (NNPCL) buy me out and run the refinery the best way they can. They have labelled me a monopolist. That’s an incorrect and unfair allegation, but it’s OK. If they buy me out, at least, their so-called monopolist would be out of the way,” Dangote said in an interview.
“We have been facing fuel crises since the 70s. This refinery can help in resolving the problem but it does appear some people are uncomfortable that I am in the picture. So I am ready to let go, let the NNPC buy me out, run the refinery.”
Dangote’s venture into oil and gas, following his successful dominance in Nigeria’s cement, salt, and sugar industries, is encountering challenges in its early stages.
The refinery is scheduled to roll out petrol to the Nigerian market in August. However, it has been operating at just over half its capacity since refining operations began in January, partly due to difficulties in securing crude from international producers.
Dangote Refinery has reported that international suppliers are either demanding exorbitant premiums or claiming unavailability of crude. As of May, NNPC had delivered only 6.9 million barrels of oil to the refinery since the previous year, according to S&P Global Platts.
NNPC Limited has a longstanding supply agreement with the refinery and had agreed to a 20% equity stake, but the refinery claims that only 7.2% of the stake has been fully paid for, missing the deadline.
To bridge the supply gap, the refinery has turned to countries like Brazil and the U.S.
In response to the supply issues, Dangote invited members of the House of Representatives to tour the refinery and compare the sulphur content of its diesel with imported samples. The tests showed that Dangote’s diesel had a sulphur content of 87.6 ppm, significantly lower than the imported samples, which had levels exceeding 1800 ppm and 2000 ppm.
Reflecting on his situation, Dangote said, “As you probably know, I am 67 years old. In less than three years, I will be 70. I need very little to live the rest of my life. I can’t take the refinery or any other property or asset to my grave. Everything I do is in the interest of my country.”
