Dangote expresses doubt if Nigeria’s refineries would ever function
The Founder and President/Chief Executive of the Dangote Group, Aliko Dangote has expressed doubt over the future functionality of Nigeria’s state-owned refineries, describing the turnaround maintenance of the refineries as trying to modernise a car that was built 40 years ago, when technology and everything have changed.
Penpushing reports that Dangote pointed out this during a facility tour with members of the Global Chief Executive Officer Africa group from Lagos Business School at the Dangote Petroleum Refinery in Lekki, Lagos.
The billionaire businessman explained that the state-owned refineries managed by the Nigerian National Petroleum Company Limited (NNPC Ltd) have consumed about $18 billion in public funds without yielding results.
Penpushing further reports that he added that his 650,000 barrel-per-day (bpd) refinery was constructed after the government of late President Umar Yar’adua declined to sell the refineries to him.
“The refineries that we bought before, which were owned by Nigeria, were doing about 22 per cent of Premium Motor Spirit (PMS). We bought the refineries in January 2007. Then we had to return them to the government because there was a change of government’, Dangote said.
“And the managing director at that time convinced Yar’adua that the refineries would work. They said they just gave them to us as a parting gift or so. And as of today, they have spent about $18billion on those refineries, and they are still not working. And I don’t think and I doubt very much if they will work. Even if you change the engine, the body will not be able to take the shock of that new technology engine he added.
Penpushing also reports that in similar development the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Bayo Ojulari, explaining that the company is considering selling the refineries due to the complexity of rehabilitation.
The Company Group Chief Executive Officer in what seems in collaboration with Dangote’s fear said a strategic review of Nigerian National Petroleum Company Limited (NNPC’s) refinery operations is underway and expected to be concluded before the end of the year.
“We’re reviewing all our refinery strategies now. We hope before the end of the year; we’ll be able to conclude that review. That review may lead to us doing things slightly differently,” he said.
Penpushing reports that Ojulari when asked if that could include selling off the refineries, said, what he was saying was sale was not out of the question, stressing that the options are on the table
“What we’re saying is that sale is not out of the question. All the options are on the table, to be frank, but that decision will be based on the outcome of the reviews we’re doing now’, he stated
Penpushing further reports that it is recalled that the Presidency in November last year, announced that plans for the complete privatisation of Nigeria’s state-owned refineries are currently underway.
The country has four major refineries, two in Port Harcourt, Rivers State, which combine to form the Port Harcourt Refining Company (PHRC) with a combined installed capacity of 210,000 barrels per day (bpd); the Kaduna Refining and Petrochemical Company Limited (KRPC) with an installed capacity of 110,000 bpd; and the Warri Refining and Petrochemical Company Limited (WRPC) with an installed capacity of 125,000 bpd.
Penpushing also reports that all the refineries have a combined installed capacity of 445,000 barrels per day, and despite significant financial injections, the refineries continue to face operational challenges, with public records and site visits revealing that the facilities have largely failed to resume meaningful operations.
The Warri Refinery, which was reopened in December 2024, it is recalled was shut down in January due to safety issues, and in May National Petroleum Company Limited (NNPC) announced the shutdown of Port Harcourt Refinery.
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