Dangote Ready to Sell His Refinery to NNPCL over Frustration

Aliko Dangote, Africa’s wealthiest man, has declared his willingness to relinquish ownership of his multibillion-dollar oil refinery to the state-owned energy company NNPC Limited.

The billionaire’s offer comes amid a new dispute with a key equity partner in the refinery, intensifying a long-standing conflict with regulatory authorities in Nigeria.

Dangote stated, “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,” in an exclusive interview with PREMIUM TIMES on Sunday.

He further expressed his frustration, adding, “We have been facing a fuel crisis 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.”

The 650,000 barrel-per-day refinery, which began operations last year after a decade of construction, cost $19 billion, more than double the initial estimate. It was expected to reduce Africa’s biggest oil producer’s dependency on imported fuel and save up to 30 percent of the foreign exchange spent on imports.

However, the project has faced significant challenges. Operating at just above half capacity since January, the refinery has struggled to source crude from international producers. Companies are either demanding exorbitant premiums or claiming unavailability of crude.

According to S&P Global Platts, NNPC had delivered only 6.9 million barrels of oil to the refinery as of May since operations began, despite a supply agreement and a 20 percent equity participation deal, of which only 7.2 percent has been fully paid for. This shortfall has forced the refinery to seek crude from Brazil and the US.

Reflecting on these difficulties, 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.”

The refinery’s operations have also been marred by controversy. Last month, Devakumar Edwin, Vice President of Oil and Gas at Dangote Group, accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of allowing the importation of substandard fuel into the country. In response, Farouk Ahmed, Chief of NMDPRA, claimed that diesel from Dangote’s refinery and others like Waltersmith and Aradel contained high levels of sulphur, which can damage vehicle engines and harm the environment.

On Saturday, during a tour of the Dangote Petroleum Refinery and Dangote Fertiliser Limited complex by members of the House of Representatives, including Speaker Tajudeen Abbas, lab tests revealed that Dangote’s diesel had a sulphur content of 87.6 parts per million (ppm), significantly lower than the 1800 ppm and 2000 ppm found in two other samples.

Despite the challenges, Dangote remains focused on contributing to Nigeria’s development. He announced plans to halt his investment in Nigeria’s steel industry to avoid accusations of monopoly, stating, “You know, about doing a new business which we announced, that is, steel. Actually, our board has decided that we shouldn’t do the steel because if we do the steel business, we will be called all sorts of names like monopoly. And then also, imports will be encouraged.”

Ultimately, Dangote’s willingness to sell his refinery to NNPCL reflects his commitment to Nigeria’s progress, even as he navigates the complexities and controversies surrounding his ventures in the country’s oil and gas sector.

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