The $18.5 billion Dangote oil refinery has started production, a major achievement that is expected to lift Nigeria out of its current quagmire of massive petroleum imports.
The refinery, which occupies 2,635 hectares of land in the Lekki Free Economic Zone in Lagos and has a capacity to process 650,000 barrels of oil per day, started producing diesel, kerosene and jet fuel on January 12.
Mr Anthony Chiejina, Group, Head, Corporate Communications of the Dangote Group, confirmed the start of production in a statement on Friday, citing the Chairman of the Dangote Group, Mr Aliko Dangote, as thanking President Bola Tinubu for his support and encouragement of.
Dangote said: “We have started production of diesel and jet fuel and the products will be in the market before the end of the month. This is a big day for Nigeria. We are delighted to have reached this important milestone.”
At the inauguration of the refinery in May last year, Mr. Dangote highlighted the role of the refinery in fulfilling the group’s corporate vision of promoting self-sufficiency and global competitiveness.
The refinery, which will come into full production later this year, is designed to meet the highest quality standards and high value products.
“When our factory is fully operational, we expect at least 40 percent of the capacity to be available for export and this will result in significant foreign exchange inflows to the country.
According to him, the achievement is to enable Nigeria eliminate what he described as the tragedy of importation dependency and stop the dumping of degraded petroleum products in the Nigerian market.
“Besides this, we intend to ensure that our factories are operating at the highest utilization capacity and at the highest efficiency so that we can export competitively to other markets,” he added.
He said the project was the realization of a “clear opportunity” for Nigeria, citing the African Union’s commitment to creating an African common market through the African Continental Free Trade Area (AfCFTA).
Nigeria could save up to $10 billion in foreign exchange and generate another $10 billion in exports with the commissioning of the refinery, he said.
The refinery, which was originally estimated to cost about $9 billion when it was planned in 2013, was completed for a total of $19.5 billion with financing spread over 50 percent equity investment and 50 percent debt financing.
Project completion
Former President Muhammadu Buhari, who inaugurated the refinery days before leaving office on May 29, 2023, said the facility would serve the local market and also pump products to neighboring countries of Chad, Niger, Cameroon, of Benin, Togo and Ghana.
Mr. Buhari described the completion of the project as a major milestone for the Nigerian economy and a game changer for the downstream petroleum market in the entire African region.
“We must create the necessary conditions for our private sector to grow and work with the public sector to accelerate economic growth across the continent. We must not allow outside forces to use some of our leaders to destabilize our economic and political course,” he said.
Nigeria, which started producing crude oil in 1951, is one of the world’s major producers of crude oil and natural gas, a major exporter of crude oil and, unfortunately, also a major importer of refined petroleum products.
It remained dependent on imports because its four state-owned refineries – in Warri, Port Harcourt and Kaduna – had been idled for more than two decades.
The refinery, which employs more than 129,000 people, is designed to produce around 50 million liters of gasoline daily. and annual production of 10.4 million tons of gasoline, 4.6 million tons of diesel and 4 million tons of jet fuel per year.