FG Begs Dangote, Complete Your $11bn Refinery Before 2019

Business mogul, Aliko Dangote has been urged by the Nigerian Government to complete his $11 billion Lekki refinery before 2019.

Dr. Ibe Kachikwu, Minister of State for Petroleum Resources, made the plea during his visit to the site in Lagos State on Monday.

Dangote refinery will have the capacity to refine about 650,000 barrels of crude oil per day, the President/Chief Executive of Dangote Group, Aliko Dangote had said.

“We are currently building the world’s largest single line refinery and petrochemical complex, and the world’s second largest urea fertiliser plant,” the businessman told Kachikwu.

Dangote further told the minister that his company would also be embarking on other projects that would add value to the Nigerian economy.

He said the Dangote Group would be building the largest sub-sea pipeline infrastructure in the world.

The infrastructure would have a length of 1,100 kilometres and will handle three billion standard cubic feet of gas per day, Dangote said.

“We will be adding value to our economy as all these projects will be creating about 4,000 direct and 145,000 indirect jobs. We will also save over $7.5bn for Nigeria annually through import substitution,” he noted.

While commending Dangote for embarking on the refinery project, Kachikwu said, “The challenge I give you as I leave here today will be one of time. I see your timing in terms of December 2019.

“But I am sure you will understand if I tell you that the refinery component should come earlier. I have made very frank commitment to Nigerians that I must exit importation of petroleum products by 2019, and I am going to keep to it. Please, continue to push the envelope and see how we can do this.

“Where do we come in as government? I think the first thing is that we must look seriously at whatever incentives this business needs. You cannot be investing $14bn in a country without sufficient incentives to drive the business.

“When you look at the cost of production in Nigeria, it remains blatantly high. Our cost per barrel today is about $27 per barrel for JV (joint venture) fields. In Saudi Arabia, it is about $9. So, we are way apart in terms of cost that anything that happens will hit us very hard.

“Even though we have been singing over the last two years that we need to drive cost down, the current figure that I still have showing me the numbers of last year has not shown me a major reduction in the cost of production,” the minister said.

Speaking on reducing the cost of oil production, Kachikwu said, “there is no way this country will produce oil at this sort of swelling prices that we see; there will be no margins left for this country.”

“For me, you rather leave the oil in the ground than produce at a cost that doesn’t make sense. So, cost is going to be a very high driver. So, that is certainly one area we are focusing on; we are working collaboratively with oil companies.

“But let’s make no mistake about it: If we cannot negotiate it down, we will compel it or we will stop the production; it does not make any sense,” the minister added.