International oil companies, biggest challenge to supply of crude oil – Dangote

The President of the Dangote Group, Alhaji Aliko Dangote says that International Oil Companies, IOCs are the biggest challenge to the supply of crude oil to the 650,000 barrels per day Dangote Refinery.

Dangote made this revelation in Abuja at the West African Refined Products Pricing and Markets Development conference organised by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA.

He said the refinery has had to rely on the importation of about 9-10 million barrels of crude oil monthly from America and Europe to remain operational.

He said, “Rather than buying crude oil directly from the Nigerian producers at competitive terms, we found ourselves having to negotiate with international trading companies who were buying Nigerian crude and reselling it to us with hefty premiums. Of course, as we speak today, we buy about 9 to 10 million barrels of crude monthly from the United States and other countries.

“IOCs have been the most difficult part of our journey. Even after scaling the crude, transporting it became another bottleneck. And lifting schedules were constantly shifted by upstream operators, and we were hit with excessive port and regulatory charges”.

Despite the challenges, he said the company has been able to export one million tonnes of petrol in the past 50 days.

Dangote also called for coordinated regional reforms to end the continent’s overreliance on petroleum imports and unlock industrial growth.

Dangote said Africa was exporting jobs and importing poverty by failing to refine its own crude oil. He noted that Africa produces about 7 million barrels of crude oil per day but consumes only 4.3 million barrels in refined form.

According to him, only about 15 per cent of African countries have GDP above $90 billion.

He said he was not against global trade but emphasized that Africa should not be exporting crude and importing refined petroleum products. He described the refinery project as extremely capital-intensive and logistically complex, saying no EPC contractor was willing to take the risk of building such in Nigeria.

He acknowledged NNPC’s support, saying that Africa lacks unified fuel specifications, making intra-continental trade difficult.