Tag: Dangote

A report by S&P Global Commodity Insights has said that Dangote Group is looking to start production at its two Nigerian oil assets in the fourth quarter of 2024, after enduring months of crude supply woes.

The company would reportedly commence production at its two Niger Delta upstream projects in Oil Mining Leases 71 and 72, starting with about 20,000 barrels per day before ramping up further in the first quarter of 2025.

The report quoting company sources said Dangote is seeking a Floating Production Storage and Offloading (FPSO) vessel with a capacity of 650,000 barrels of crude.

Read Also: Marketers get FG’s nod to lift fuel directly from Dangote Refinery, other

“The company source said production at the company’s two Niger Delta upstream projects in Oil Mining Leases 71 and 72 would start at around 20,000 b/d, before ramping up further in the first quarter of 2025,” the report said.

The company, it was learnt, holds an 85 per cent stake in West African E&P Venture, which in turn has a 45 per cent working interest in the two blocks, alongside the state-owned Nigerian National Petroleum Company’s 55 per cent.

The other stakeholder in West African E&P is Nigerian upstream player, First E&P, which operates OMLs 71 and 72.

“The licences are located in the shallow water in the southeast of the troubled Niger Delta, just 22 km from the onshore Bonny terminal. They contain the Kalaekule and Koronama oilfields.

“Discoveries were first made on the blocks in 1966, and Shell began production there two decades later. Output peaked at 21,000 b/d in 1999, before declining in 2003,” S&P explained.

Alhaji Aliko Dangote, the President of Dangote Group, on Tuesday, said that the Dangote Refinery was constructed without any government incentives.

Dangote made this known during his keynote address at the Crude Oil Refinery Owners Association of Nigeria (CORAN) Summit in Lagos.

The Summit has the theme,”Making Nigeria a Net Exporter of Petroleum Products.”.

Dangote, who was represented by Mr Ahmed Mansur, Dangote Group, said that there was need for investor incentives to realise country’s vision of becoming a refining hub.

He stressed the importance of ensuring sufficient feedstock availability, while calling for an end to mortgaging crude oil.

“It is unfortunate that while countries like Norway are investing oil proceeds into a future fund, we in Africa are spending our future earnings,” Dangote said.

He also called for prioritising the implementation of domestic crude supply obligations and expanding crude oil production capacity to meet the demands of new refining facilities.

Dangote commended the efforts of President Bola Ahmed Tinubu, highlighting the government’s active steps to accelerate International Oil Companies (IOC) divestments and other initiatives.

Despite being Africa’s largest crude oil producer, Dangote said that Nigeria had long relied on imports to meet its refined petroleum product needs.

He said, “Nigeria is poised to transition from a “net importer” to a “net exporter” of refined products, positioning itself as a significant player in global downstream trade.

“This impending transformation is indicative of our progress as an industry and as a nation. We owe a debt of gratitude to President Tinubu for his unwavering support throughout this journey.”

Dangote also addressed the opportunities in Africa, noting that the continent imports about three million barrels of petroleum products daily, with half of that coming from coastal countries.

He highlighted that these countries produce over 3.4 million barrels of crude oil daily, with imports primarily sourced from Europe, Russia and other regions.

“In 2023 alone, this trade was estimated at approximately 17 billion dollars.

“However, these markets will be better served from Nigeria, reducing logistics costs and allowing countries to purchase their petroleum product requirements just-in-time,” he explained.

He asserted that Nigeria and Africa could achieve self-sufficiency in petroleum products, retaining all economic value locally.

“We have succeeded in cement production, and we can certainly replicate that success in petroleum refining.

Dangote highlighted that the Dangote Refinery already produces sufficient diesel and jet fuel to meet Nigeria’s needs and is ramping up production of PMS to meet domestic demand.

“The refinery has also begun exporting products to markets in Europe, Brazil, the UK, the USA, Singapore, and South Korea.

He acknowledged that global developments in the petroleum sector, particularly in Europe, are likely to disrupt traditional trade flows for refined products in Africa.

“Nigeria is uniquely positioned to capitalize on these opportunities and become a formidable player in the global oil industry.

“As a vibrant exporter of refined products, Nigeria stands to improve its trade balance and generate much-needed foreign currency.

“There is no doubt about Nigeria’s potential as a refining hub; let’s work together to make it a reality,” he added.

In his address, Gov. Babajide Sanwo-Olu of Lagos State urged oil and gas stakeholders to leverage the sector’s immense potential to become a global supplier of refined petroleum products.

The governor was represented by Mr Biodun Ogunleye, Commissioner for Energy and Mineral Resources.

He affirmed the state’s commitment to supporting the vision through initiatives that enhance infrastructure, logistics and regulatory frameworks necessary for investment in energy and refining sectors.

Read Also: Dangote refinery: Marketers insist on importing 100mtn of petrol

He noted that the Dangote Refinery, located in Lagos, exemplifies the potential that exists when vision meets conducive conditions for success.

“We are at a pivotal moment in Nigeria’s economic journey, where increasing refining capacity is essential for reducing reliance on imports and positioning Nigeria as a significant player in the global energy market.

“This focus on refining will stimulate job creation, enhance foreign exchange earnings and contribute to economic diversification.

“Lagos State is the economic powerhouse of Nigeria, and I recognise the central role it plays in driving the nation’s industrial and energy sectors,” he said.

(NAN)

…say 650,000b/d local refinery is focused on export

Marketers of the Premium Motor Spirit (PMS) petrol under the aegis of Petroleum Retail Outlets Owners Association of Nigeria (PETROAN) on October 7, insisted they are currently negotiating to import 100,000 metric tons of the product monthly.

According to the association, depending on the domestic refineries for petrol has crippled their businesses to the extent that only 500 out of over 6,000 retail outlets are still operational.

The situation may liquidate their businesses and place them under the receivership of their lenders if they do not seek alternatives to Dangote Petroleum Refinery and Petrochemicals is interested in the export market and the Nigerian National Petroleum Company Limited (NNPCL) that its Port Harcourt Refinery has failed to commence production at the August target.

Its President, Dr. Billing Harry made this known to The Nation on the phone.

“We are exploring the possibility of us bringing our own product. We are advancing on that. We are trying to arrange for us to bring 100,000 metric tons per month,” he said.

Describing the move as a plan until payment is made for the product, he said “Once we do that and look for how to pay, then it becomes news. For now, we are still in the pipeline.”

He said his association is tired of depending on the 650,000 barrels per day Dangote plant, whose body language has indicated that the company is more interested in the export market.

The PETROAN boss said: “That is the only because we can’t depend on Dangote. Dangote clearly, the mind is more focused on the export market.”

Read Also: Senior Advocate commends Fed Govt for embracing Dangote refinery 

Aside from that, he said the refinery has kept them guessing for too long without communicating its terms of engagement to them.

According to him, there was speculation that the refinery had planned to sell the product to them directly. He wondered why the company refused to inform the marketers since it has the different associations’ phone numbers.

He urged the refinery to partner directly with PETROAN, which has over 6,000 retail outlets.

Harry said: “NNPCL, from rumour, we are hearing NNPCL is saying he (Dangote) can deal with us directly. That is not the way to work. We should be able to talk to him (Dangote). We should be able to hear from him. There is no need to say we want to sell to you when you can reach us and we can agree or disagree instantly.”

NNPCL, Chief Communications Officer, Mr. Olufemi Soneye, who The Nation dialed his phone and sent a text message to confirm whether the national oil company is no longer the sole off-taker of Dangote’s petrol did not respond.

Meanwhile, Harry said it was surprising the marketers were yet to get an official communication about the pricing from the refinery.

According to him, it was through the rumour mill the members learnt the refinery would sell petrol at N766 per litre.

He said surprisingly, the refinery and NNPCL were yet to agree on one pump price.

On how the state-owned NNPCL has dashed the high hope of commencing production from its Port Harcourt Refinery in August, he recalled the members were patriotically waiting for Dangote to produce its fuel but since the product cannot get to them they have to seek alternatives.

His words: “PETROAN has been at the forefront of insisting that in-country refining of product should be the order of the day.

“If we have a petroleum product that is refined in Nigeria and not being able to reach us in distribution, then we have to find alternative methods.

“Port Harcourt Refinery we expected and anticipated that at least August we should have started doing public business, we didn’t see that and we also have not heard any definitive and productive business engagement.

“So when there is that situation, we have over 6,000 retail outlets, out of which number that is doing business is not up to 500. You can say that is a redundant business and before you know our financial partners will start calling for our retail outlets and therefore cripple us. So, if there is any option we can get we have to get it.”

The Federal Government has refused to intervene in the ongoing controversy between the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery over petrol pricing.

Special Adviser to the President on Information and Strategy, Bayo Onanuga, made this known during a press briefing  at the State House on Wednesday, stating that both entities are business concerns operating in a deregulated market. 

The PMS regime has been deregulated, making Dangote a private company and NNPC a limited liability company.

Onanuga emphasized that the Petroleum Industry Act (PIA) allows NNPC to operate independently, despite being owned by the federal, state, and local governments. 

According to Onanuga, private marketers who find NNPC or Dangote’s prices too high can import fuel and sell it at a reasonable price, benefiting consumers, explaining that this is made possible by the deregulated market, which ultimately benefits consumers if a price war starts.

“Now to the question about the cost of PMS, well, let me say that, as far as this government is concerned, the PMS regime has been deregulated, Dangote is a private company. We should not forget NNPC is a limited liability company. Whatever controversy both of them are having is their own problem. 

Read Also: NNPCL, Dangote Refinery row rages over price of petrol

“If you go by the terms of Petroleum Industry Act, NNPC is on its own, even though it’s owned by the federal government, the state governments and local councils, but it’s operating as a limited liability company. 

“You can see what the private marketers said; that if think they find the NNPC or Dangote’s prices too much for them, they will resort to importing fuel because it’s a deregulated market, at the end of the day, it’s the consumer who benefits if a price war starts.

“If NNPC’s fuel is too much (expensive), the private marketers can go to the market and bring in their own fuel and sell at the price that they think is very reasonable and profitable for them. 

“So my answer is that, as far as government is concerned, government is not dabbling to this controversy. Dangote is a private company, it’s working on its own. NNPC is a limited liability company and it has the right to fix the price of its own fuel”, he said. 

The controversy began when NNPC revealed that Dangote Refinery sold petrol to them at N898 per liter, which Dangote disputed, calling the claim misleading and mischievous. 

The refinery’s pricing has been a subject of debate, with reports suggesting varying prices across different states.

Reports indicate petrol prices range from N950.22 per liter in Lagos State to N1,019.22 per liter in Borno State. 

Other states, including Oyo and Ogun, Rivers and Imo, and the Federal Capital Territory, Abuja, have prices ranging from N960.22 to N992.22 per litre. 

Oil marketers have assured that Premium Motor Spirit (PMS) prices will drop once they start directly lifting products from the Dangote Refinery.

The Nigerian National Petroleum Company Limited (NNPCL) is the sole entity lifting products from the refinery, which led to a significant surge in petrol prices.

Prices in Lagos have skyrocketed to ₦950 per litre, with consumers in northern areas paying up to ₦1,000 per litre.

The sharp increase has placed an additional strain on businesses and households already dealing with rising inflation.

However, in a move expected to provide relief to Nigerians facing soaring petrol prices, the Spokesperson for the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, yesterday, provided an optimistic outlook during an interview on National Television, monitored by The Nation.

He confirmed that discussions between marketers and the Dangote Refinery for direct product lifting are underway, and expressed confidence that prices will drop once these arrangements are finalised.

Ukadike emphasised the critical role independent marketers could play in stabilising petrol prices across the country.

“It is just very simple. It shows that the liberalisation of the market is on the course because there is no way Dangote refinery will be producing petrol in Nigeria without considering IPMAN as one of its strategic stakeholders,” he remarked.

Highlighting IPMAN’s extensive network of filling stations, which account for approximately 85 percent of the country’s distribution outlets, Ukadike suggested the involvement of independent marketers in product lifting from the refinery could resolve current pricing disparities.

He said: “We were even thinking that one of his first points of call was to discuss with IPMAN and not NNPCL because we can distribute every single drop of products produced by Dangote Refinery.”

He noted that competition and independence in sourcing products would drive down petrol prices, saying, “Immediately after we discuss and commence direct lifting of product from Dangote, the issue of pricing and differential in pricing will be gone. What we are seeing here is price disparity. But if IPMAN becomes independent, prices will drop.”

Read Also: I regret not buying Arsenal, says Dangote

Drawing from the successful reduction in diesel (AGO) prices when independent marketers began sourcing directly from Dangote, Ukadike expressed optimism for a similar outcome with petrol.

“Dangote also opened up to IPMAN when he started producing AGO, diesel. We entered the market and started buying it, and prices of AGO came down from N1,600 to between N1,000 to N1,100,” he explained.

He concluded by calling for an inclusive market, noting, “This is a deregulated economy, and every stakeholder and player should be given equal opportunity.”

The President and Chief Executive of Dangote Group, Alhaji Aliko Dangote, has expressed regret for not buying Premier League Club, Arsenal FC.

He said it appears that the “time has passed” for him to buy the club stating that he wished he had bought the English side club when the team was valued at around $2 billion.

The billionaire business mogul in 2020 made known his intention to go for the North London club after his refinery project.

However, speaking in an interview with Bloomberg’s Francine Lacqua in New York, Dangote explained that he missed out on buying Arsenal by committing his resources to the refinery project.

He said, “I think that time has passed. The last time when we had this interview, I told you as soon as I finish with the refinery, I am going to try and buy Arsenal.

Read Also: Dangote petrol’s uneasy start

“But you know everything has gone up and the club too is doing very well, Arsenal is doing extremely well right now. That time Arsenal wasn’t doing well.

“I think I don’t have that kind of excess liquidity to go and buy a club for $4 billion so to speak and use it as a promotional something.

“But what I will do is to continually be the biggest fan of Arsenal. I watch their games anytime they are playing. So, I will remain a major supporter of Arsenal but I don’t think it makes sense today to buy Arsenal.’

When asked if he regretted not buying when Arsenal’s value was lower, he said: “Actually, I regret not buying it before but you know my money was more needed in completing my project (Dangote refinery) than buying Arsenal. I would have bought the club for $2 billion but you know I wouldn’t have been able to finish my project. So, It was either I finish my project or go and buy Arsenal.”