The President and Founder of Dangote Refinery, Aliko Dangote, has revealed plans to refine all crude oil produced in Nigeria.
He said this is part of the unfolding “Nigeria First” policy.
The Kano-born billionaire said the refinery, which would expand to a 1.4 million bpd capacity in the next 3 years, will absorb all the crude produced in the country.
According to him, this aligns with the vision of President Bola Tinubu to move Nigeria from being a net exporter of crude oil to an exporter of refined petroleum products only.
Nigeria currently produces about 1.5 million barrels of crude oil per day, making it the largest producer in Africa.
The Nigeria First policy is a set of government measures designed to ensure that local industries and companies benefit from national resources before exports take place.
The policy has been implemented in various forms since President Tinubu took office, including the recent temporary ban on shea butter exports to ensure adequate supply for local manufacturers.
Dangote said the policy will enable Nigeria to export only refined petroleum products rather than crude oil.
“We are in support of Mr. President’s dream to produce petroleum products rather than exporting crude. And I think we’re on the way to achieving that.
“The policy of ensuring processing of all crude and exporting only finished petroleum products, which I think is a great policy,” he said.
Expansion anchored on policy
Speaking further, Dangote said the 1.4 million bpd expansion of the refinery is based on the government’s policy to prioritize local players.
According to him, without such policies, it would be difficult for the refinery to absorb all the crude oil in the country, as some producers would prefer to export.
“It’s a policy by Mr. President now that this is what his vision is. I’m sure the government will not sit back and allow our crude to go.
“I’m sure things are going to change. Things are also changing right now with the policy of Mr. President to do that.
“If there’s no policy then it’s an issue. It will be very difficult. We’ll face a bit of challenges. I think there shouldn’t be a problem,” Dangote said.
A 1.4 million bpd crude oil refinery would make Nigeria home to the largest refinery in the world, surpassing India’s Jamnagar refinery, which has a capacity of 1.2 million bpd.
Such an expansion would mean the refinery will require more crude oil from Nigeria and possibly other countries.
So far, Dangote has struggled to secure crude oil from the state-owned NNPCL, which has already committed much of its output to long-term crude-for-loan deals with international financiers.
While the policy to refine all Nigerian crude appears ambitious, its implementation remains uncertain.
Most of Nigeria’s crude is produced by international oil companies (IOCs) such as Shell and TotalEnergies, making it difficult for the government to compel them to sell exclusively to Dangote.
Nigeria’s Petroleum Industry Act (PIA) mandates private oil firms to make crude available to local refiners on a “willing buyer, willing seller” basis.
However, the law does not require them to sell to local refineries only.
A new petroleum industry bill is currently being debated by lawmakers.
There are indications that the new legislation may revise parts of the existing law.
But whether it will compel international oil companies or other upstream producers to sell crude only to Nigerian refiners remains unclear.
