Why Dangote Refinery may not participate in crude-for-fuel swap —Edwin

Dangote Petroleum Refinery is under construction and 650,000 barrels per day refinery is expected to make Nigeria self-sufficient and net exporter of refined petroleum products. At the weekend, the Minister of State for Petroleum Resources, Chief Timipre Sylva, toured the project complex for a first-hand experience. OLATUNDE DODONDAWA was there and gives his report.

DANGOTE Petroleum Refinery will be one of the largest refineries in the world when completed with 650,000 barrels per day production and ability to process various crudes from around the world.

The Federal Government delegation which visited the complex at the weekend, was led by the Minister of State for Petroleum Resources, Chief Timipre Sylva; Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari; Acting Director of Department of Petroleum Resources (DPR), Ahmad Rufai Shakur; Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote and other heads of parastatals.

Addressing the delegates at the fertiliser complex conference hall, the Group Executive Director, Strategy, Capital Projects and Portfolio Development, Dangote Refinery and Petrochemical Limited, Mr Devakumar Edwin, hinted that the company may not participate in the Direct-Sale-Direct-Purchase (DSDP) scheme otherwise called crude-for-fuel swap deal when it is ready to source for its crude.

He said Dangote plans to take advantage of both local and foreign crude supplies, adding that it will not participate in the crude-for-fuel swap deal that is managed by the NNPC.

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The DSDP is a swap arrangement by the NNPC whereby it allocates several hundred thousand barrels per day of the country’s oil to private refiners or contractors and the contract holders deliver fuel, mainly premium motor spirit (PMS), otherwise called petrol, and Dual Purpose Kerosene (DPK) from abroad in exchange for the oil they receive from NNPC.

“The Dangote Refinery, which is designed to maximise petrol output, will produce enough to allow for a small surplus of that fuel for export. It will also be able to send a large volume of diesel and jet fuel to international markets. The refinery has been designed to process varieties of crude from sweet to light crude sourced both locally and abroad. We are going to buy the crude just at the export price and will sell our products at the import price. The crude swap is operating only for the importers of the product. Dangote plans to export its diesel to Europe and gasoline to Latin America, Western and Central African markets,” he said.

Apart from being a private company with aim of profit taking, he stated that Dangote Refinery has designed a robust Corporate Social Responsibility (CSR) programme aimed at increasing and improving indigenous capacity for its host communities.

He said at Dangote Refinery, the value of ‘responsibility’ is collective and finds a natural place as a key driver in the conduct of its entire business operations and in its relationship with every stakeholder in its host communities.

Dangote Refinery’s strong local ties and commitment to the host communities have been intrinsically important to the world largest single train refinery, which is still under construction.

Edwin said since the commencement of the refinery project, the company has prioritised sustainable community development through creating shared value for its local communities, which has been critical in not only achieving operational success but also protecting the company’s social license to operate.

It was the commitment that resulted in the recent training of 200 youths from the Ibeju-Lekki host community in Lagos State, in vocational skills including plumbing, masonry, welding, iron bending, auto mechanics and electrical works.

The programme was executed in conjunction with the National Directorate of Employment (NDE) and it is expected to reduce youth unemployment and restiveness in the community.

Edwin also informed the delegates that Dangote has trained about 150 Nigerians in refinery operations and are fully employed by the company.

Federal Govt pledges support with feedstock, others

The Federal Government threw its weight, once again, behind the 650,000 barrels per day capacity Dangote Refinery and Petrochemicals Plant with crude oil feedstock and other necessary inputs for the success of the project. Chief Sylva stated this during the tour of the plant at the weekend.

He stated that the refinery will attract more Foreign Direct Investment (FDI) into Nigeria upon completion, adding that the plant was a symbol of the Nigerian success story.

The minister said it was necessary to support the Dangote Refinery project to ensure its successful completion in order to realise the Federal Government’s aspiration of reversing the ugly trend of fuel importation.

“The Dangote Refinery is a very impressive project done by a Nigerian for Nigeria,” the minister said.

On his part, Mallam Kyari stated that NNPC was in the process of establishing two new 200,000bpd condensate refineries to boost in-country refining capacity.

He stated that upon completion, the condensate refineries, coupled with the 445,000bpd capacity of the existing refineries which are being refurbished, and the 650,000bpd Dangote Refinery, would transform Nigeria into a net exporter of petroleum products.

He added that these complementary efforts by the NNPC and the Dangote Group would guarantee energy security for Nigeria.

Mallam Kyari reiterated that the national oil company was not in contest for market share with the Dangote Refinery, but rather would provide support to the project to boost in-country refining capacity.

“Our objective is to make Nigeria a net exporter of petroleum products and you can only achieve that by complementing each other, both the public and the private sector. We are going to do more and we actually need more of these private sector refineries for Nigeria to become a net exporter of gasoline and other associated products,” Mallam Kyari said.

Dangote commends Federal Govt for its support.

The President of the Dangote Group, Mr. Aliko Dangote, who was on ground to receive the Federal Government team, commended the government for the support towards the actualization of the $12billion project.

He said his group opted for the biggest refinery in the world because of his firm belief in the Nigeria project. “We believe in Nigeria and if we don’t do it ourselves, nobody will come down to do it for us. There is three per cent growth population increase annually in Nigeria, so apart from that, Nigeria is supposed to meet the needs of West, East and Central Africa in terms of supply,” he said.

Nigerian Tribune