The Dangote Refinery, a major project in Nigeria, is facing a new controversy, sparking concerns regarding safety, quality, and ethical considerations. The dispute has arisen between the Nigerian National Petroleum Corporation (NNPC) and Aliko Dangote, Africa’s wealthiest individual and owner of the Dangote Group.
Sources indicate that Aliko Dangote has applied for a license to operate the refinery, a crucial step before commencing production. However, NNPC, the regulatory authority, has hesitated to grant the license due to safety concerns, as the refinery remains incomplete. Additionally, Dangote’s attempts to purchase crude from NNPC have been declined on the grounds that crude cannot be sold to an unfinished refinery. To circumvent this issue, Dangote is allegedly exploring the possibility of sourcing Nigeria’s crude through trading houses, a move that could be perceived as unconventional.
Even if Dangote manages to secure the crude, there are concerns about safety and product quality raised by Dangote employees, contractors, and some NNPC officials. Incomplete refinery facilities could compromise the quality of jet fuel and diesel produced, potentially posing risks to lives. The current state of the refinery only allows for the first phase of crude distillation, akin to operations conducted by illegal refineries in the Niger Delta region. However, due to the refinery’s complex nature and the uncompleted catalytic cracking unit, the quality of refined products is uncertain.
Reports suggest that some individuals within the Dangote Group have expressed reservations about initiating refinery operations without completion. Nevertheless, Dangote appears eager to make the project work, possibly due to financial pressures.
Dangote is reportedly grappling with significant debt, placing the company at risk of receivership if additional funds to repay loans are not secured by December. This financial strain may explain Dangote’s urgency to obtain a license for refinery operations, even in its incomplete state.
Earlier this year, the refinery was hastily commissioned by former President Buhari to enable Dangote to access equity funding from the Nigerian Government and receive a crude allocation of 300,000 barrels per day. This allocation was intended to be sold to generate funds for creditors and contribute to the refinery’s completion. However, the allocation was put on hold with the inauguration of President Tinubu’s administration, as it was discovered that the refinery was far from completion and had been falsely commissioned to secure the crude allocation.
The standoff between Dangote and NNPC highlights broader concerns related to safety, quality, and financial stability surrounding the Dangote refinery project. The resolution of this dispute will have significant implications for Nigeria’s oil industry, as it addresses potential risks to worker safety, product quality, and the financial stability of a prominent business figure.
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