The Organisation of Petroleum Exporting Countries (OPEC) has noted in its World Oil Outlook that the Dangote Refinery project could refine as much as 650,000 barrels of crude oil per day at full capacity upon completion. This, according to it, is expected to reduce the need for fuel imports in West Africa. This would mean that at that rate, Dangote Refinery when fully in operation, would refine close to 237.3 million barrels per year. Nigeria, alone, imported 22.5387 billion litres of petroleum products worth over N3.24 trillion from refineries abroad in 2017.

According to OPEC, in Africa, there are 50 refining projects, which, if all built, would add nearly five million barrels per day (bpd of new refining capacity to the continent.

The Group Executive Director, Strategy, Portfolio Development and Capital Projects, Dangote Industries Limited, Mr Devakumar Edwin, said OPEC was correct in its estimation, adding that all hands were on deck to deliver the refinery on time.

Key Facts To Note:

• Dangote Group’s ongoing refining and petrochemicals project can meet 100 per cent of the domestic demand for petroleum products (petrol, diesel, kerosene and aviation fuel), in Nigeria leaving the surplus for export in line with OPEC’s expectation -Dangote Group said.
•  This year, the outlook represents a significant reversal from recent history. For the first time in many years, projected firm additions at 1.1 million bpd exceed West African regional demand growth for 2018 to 2023 at 0.7 million bpd.
• This change relates primarily to one project in Nigeria now under construction, which is the Dangote Refinery. 
• Since the project is in West Africa, its implementation does not necessarily alter the situations in North and East/South Africa. What should happen, especially in West Africa, is a reduction in the need and opportunity for product imports.”
• Last year’s World Oil Outlook hinted that, in Africa, ‘new projects could improve the situation somewhat toward the end of the period.’ This year, increasing confidence that the Dangote project in Nigeria will go ahead is indeed changing the picture.

• Allowing for some uncertainty in the project’s start-up timetable, incremental potential in Africa is expected to continue to lag incremental demand-based requirements through 2020, after which the potential is for a balance or excess requirements.
• A deficit of around 0.2 million barrels per day in 2019 to 2020 is estimated to swing to an excess of around 0.3 million bpd by 2022 to 2023.
• It must be borne in mind that this regional outlook is unusual in that it hinges largely on a single project.”
• The Dangote Refinery is expected to be finished in 2019, with production set to commence in 2020.

Also See: World Bank Invests $200m To Promote Entrepreneurship Projects In Egypt

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.