Quite in line with the report of www.trendsnafrica.com , the Dangota’s much talked about oil refinery, which boasts of changing Nigeria’s oil refining sector, may face delays in commissioning, quite contrary to the claims of the promoters. That is not good news for the country, which has the ubiquitous distinction of being oil rich and at the same time importing 90% of the refined oil requirements from other countries. The irony peaks up when the imported oil is priced several notches above the crude it mines out.
Nigeria’s not so well run oil refineries in the cities of Port Harcourt, Kaduna and Warri should have been replaced years ago. But they are there operating at 5.5% of their combined capacity of 445,000 barrels per day (bpd). Who should be blamed for years of neglect and mismanagement? To add fuel to the fire, together, they posted an operating loss of US$365m in 2018.
Aliko Dangote’s announcement in 2013 that his conglomerate had signed an initial US$3.3bn loan deal with local and foreign banks to fund the construction of a new oil refinery in the country was a succour to the country. The plant when it goes into production, will produce 650,000 bpd plant enough, which is enough to meet domestic needs and provide a surplus for export. The much-touted project is now caught up in excruciating delays and red-tape.
Dakote changed many goal posts since then. The refinery was to start production in 2016. But plans to expand its capacity and a change of location to a 2,500-hectare site in Ibeju Lekki on the outskirts of Lagos pushed the deadline furhter. Now the deadline for completion of construction shifted to late 2019. The commencement of production was expected in 2020. Experts say that the deadline has to be rolled over further due to difficulties in importing steel and other equipment. Industry experts now feel that nothing is going to happen before 2022.
The delay, which is cock sure to happen, though the company has yet to come out with an official statement to that effect, is a setback for US$ 15.5 billion asset backed Dangote. Undeniably, the billionaire has a track record of delivering megaprojects in cement, sugar, salt, flour and packaged food in time.
