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‘Dangote Refinery ‘ll be sector’s game-changer’ for Nigeria’s oil industry

Ghana’s Deputy Minister for Energy (Petroleum),  Mohammed Adam, has said the 650,000 barrels per day (bpd), refinery being built by Dangote Refinery and Petrochemical Company, will be a game-changer for Nigeria’s oil industry.

The refinery, estimated to cost over $14 billion, according to Adam, will attract global attention and market. He added that the initiative has raised hope for other African countries on the viability of investing in a huge refinery.

Adam spoke at the just-concluded 2017 African Downstream Oil Trading and Logistics (OTL) Expo in Lagos. The Expo’s theme was: “Downstream-Renewed Opportunities”.

He said the refinery would  open a sub-regional market with a West African price index for countries in the sub-region.

He said when the refinery becomes operational, Nigeria’s import of products would stop or reduce drastically, and the cost of products imports from Europe and Asia by smaller consuming countries around Nigeria would be expected to increase.

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This is because Nigeria’s large petroleum imports, which are hugely subsidised and taken across the borders, would no longer be there for sub-regional neighbours.

Adam said: “The development in Nigeria reinforces my conviction that there is strong basis for shared infrastructure in our sub-regions, as this could integrate our industries, lower cost of business and reduce the prices of petroleum products.

“Transportation of fuels across the continent is largely by bulk road vehicles. It increases substantially, the cost of petroleum products for our people. It is possible working with the private transportation companies in our markets to build enduring Private-Public partnerships to build the railways and the pipelines that will cost-effectively deliver petroleum products across the regions while building substantial economic value for the states, the business and the people across this continent.”

According to him, developing an African market no doubt imposes greater demand for skills, adding that there is the need to readjust the educational curriculum and open new centres of excellence to provide relevant skills to the youth and prepare them for a very demanding industry.

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Adam also said there was the need to harmonise policies and opportunities to allow the African downstream to deliver the infrastructure and services required by African economies.

To him, the drive to move from “dirty fuels” to “cleaner fuels” has resulted in most countries opting to tighten the specifications for gasoline and gasoil. He noted that the transition to low-sulphur fuel is the most topical issue that must be discussed at all levels on the African downstream industry.

Nigeria, Ghana, Kenya and other African countries had specified sulphur levels for diesel imported, Adam said, supporting the call for African countries to move to cleaner fuels as it presents an opportunity for investments in domestic refineries to meet national specifications, allowing the downstream to be supportive of the development goals of African economies.

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According to him, following the sustained lower oil price environment of the last three years, there has emerged what is called “petro-democracy” in which citizens’ demand for greater accountability from their governments and players in the petroleum industry have improved. The demand for domestic prices to follow a symmetrical trend with international prices led to downward adjustments in prices in some countries.

According to Adam, one of the greatest challenges confronting the downstream petroleum industry was the inability to match the upstream industry in the area of safety and security. He noted that operating at the very end of the petroleum value chain, proximity to human populations, their health and safety, and consequently, their property, the requirements for improved safety standards placed on Nigerian and other African countries the duty to be more responsible.


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