The Organisation of Petroleum Exporting Countries (OPEC) is upbeat at the prospect of the Dangote Oil Refinery serving to drive world crude oil refining capacity increase especially in Africa by 2020.
The organisation in the current edition of its World Oil Outlook (WOO), said that the Dangote refinery, which is the first privately owned and operated refinery in Nigeria, will refine as much as 650,000 barrels of crude oil per day at installed capacity.
Presently, total world oil production in 2019 averaged 80,622,000 barrels per day. Approximately 68 per cent is coming from the top ten countries, and an overlapping 44 per cent comes from the 14 current OPEC members.
OPEC said in the outlook that the world is expecting some capacity expansion coming from Nigeria by 2020, either through the rehabilitation of existing refineries – in part to raise their utilisation rates, or through grassroots projects, like the Dangote Oil Refinery.
OPEC stated, “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 (mb/d) in 2019 to 2020 is estimated to swing to an excess of around 0.3 mb/d 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.”
OPEC said the completion of the project would reduce the importation of petroleum products in West Africa. “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.
According to OPEC, in Africa, there are some 50 listed refining projects, which, if all built, would add nearly 5mb/d of new refining capacity to the continent.
The organisation noted, however, that in recent WOOs, the proportion of projects considered firm has generally been low, for example, 0.4 mb/d for the 2017 to 2022 period in WOO 2017. “This year, the outlook represents a significant reversal from recent history. For the first time in many years, projected firm additions at 1.1 mb/d exceed regional demand growth for 2018 to 2023 at 0.7 mb/d.
“This change relates primarily to one project in Nigeria now under construction. Recognising that this one major project is in West Africa, the prospects for North and East/South Africa continues to be for further increases in regional net product imports.
“It must be borne in mind that this regional outlook is unusual in that it hinges largely on a single project. Moreover, 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,” it stated.
Reacting to the OPEC position, Group executive director, Strategy, Portfolio Development and Capital Projects, Dangote Industries Limited, Mr. Devakumar Edwin, said the Organisation was correct in its estimation and that all hands are on deck to deliver the refinery on time.
He stated that the Dangote Group’s ongoing refining and petrochemicals project can meet 100 per cent of the domestic requirement of all liquid petroleum products (Gasoline, Diesel, Kerosene and Aviation Jet), leaving the surplus for export in line with the OPEC expectation.
He said that this high volume of PMS output from the Dangote Refinery would transform Nigeria from a petrol import-dependent country to an exporter of refined petroleum products.
Edwin disclosed that Dangote is also constructing the largest fertiliser Plant in West Africa with capacity to produce 3.0 million tonnes of Urea per year as part of the gigantic economic transformation project.
He explained that the Dangote Fertiliser complex consists of Ammonia and Urea plants with associated facilities and infrastructure.
Also, the president of Dangote Groups, Alhaji Aliko Dangote at the visit of the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, recently in Lagos, said the project would definitely transform the Nigerian economy.
“We have a couple of projects at hand and we will continue with these transformative projects. The biggest problem we have in Nigeria is that we currently import more than we produce like any other African countries. But, by the time we finish our fertiliser plant, Nigeria will be the largest exporter of fertiliser in Africa. We will also be the largest exporter of petrochemicals and the largest exporter of petroleum products in the whole of Africa. This is a major transformation.”
He said the three billion Standard Cubic Feet gas pipeline and other Dangote Projects are geared towards Nigeria’s economic transformation.
Also, chief operating officer, Upstream, Nigerian National Petroleum Corporation (NNPC), Engr. Bello Rabiu, disclosed at the Nigeria Oil and Gas Opportunity Fair (NOGOF) in Yenagoa, Bayelsa State, recently described Dangote Refinery, currently under construction as a project that would assist Nigeria’s quest of attaining 1.095 million barrels per day self-sufficiency in the refining of petroleum products.
Rabiu commended the Dangote for his commitment to Nigeria’s downstream sector. According to him, the coming on stream of the Dangote 650,000 barrels-per-day Refinery and efforts by NNPC to revamp the country’s refineries in Port Harcourt, Kaduna and Warri, would help Nigeria to achieve zero importation of refined petroleum products.
The Dangote refinery, 650,000 barrels per day (bpd) when come on stream will transform the Nigerian economy from a net importer of refined petroleum products to a net- exporter of petroleum products.
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