Dangote Refinery can resolve Nigeria’s forex issues, says S&P Global


…As Dangote confirms July start for petrol production


International financial analytics corporation S&P Global has highlighted the potential of the 650,000 barrels per day (bpd) Dangote Oil Refinery and Petrochemicals company to address Nigeria’s foreign exchange (forex) challenges and stimulate significant economic development.

This insight emerged during S&P Global’s onsite visit to the Dangote Refinery at Ibeju-Lekki, Lagos, as part of its sovereign credit ratings assessment of Nigeria, accompanied by officials from the Federal Ministry of Finance.

S&P Global, headquartered in Manhattan, New York City, praised the largest single-train refinery complex in the world for its capacity to enhance Nigeria’s oil sector and positively impact the nation’s economy.

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Director and Lead Analyst for Sovereign and International Public Finance Ratings at S&P Global Ratings, Ravi Bhatia, who led the delegation, emphasized that the refinery could transform Nigeria into a net exporter of petroleum products, boosting revenue and alleviating pressure on forex reserves.

“It is a very impressive facility, able to process 650,000 barrels a day at full capacity. It is the largest single-train refinery complex in the world. Nigeria is a big exporter of crude but has issues with importing refined fuels. Refining crude domestically will save money and potentially forex, benefiting the economy in the medium term,” Bhatia said after a four-hour tour of the facility.

Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited (DIL), reaffirmed that the company aims to stimulate industrial development, job creation, and economic prosperity by leveraging Africa’s crude oil resources to produce refined products locally. He also confirmed the commencement of premium motor spirit (PMS) production this July.

Edwin noted that the $20 billion facility’s products meet international standards and can satisfy 100 per cent of Nigeria’s demand for petrol, diesel, kerosene, and aviation jet fuel, with surpluses available for export. The refinery currently operates at 350,000 bpd but is set to scale up to at least 500,000 bpd by July/August, starting the refining of petrol and ultra-low sulphur diesel.

The S&P team commended Aliko Dangote, President of Dangote Industries Limited, for incorporating advanced technologies and quality control measures, including a state-of-the-art Central Control Unit for smooth automation of operations. The team included Associate Director Maxmillian McGraw, Director of Corporate Ratings Omegu Collocott, Senior Analyst of Bank Ratings Charlotte Masvongo, and Director of Financial Services Samira Mensah.

The refinery, designed to process a wide range of crudes including African, Middle Eastern, and US Light Oil, adheres to Euro V specifications and complies with US EPA, EU emission norms, DPR emission/effluent norms, and ARDA standards. Edwin highlighted the pride in a Nigerian company designing and building the world’s largest single-train refinery complex, acting as its Engineering, Procurement, and Construction (EPC) contractor. The refinery also features a self-sufficient marine facility capable of handling the world’s largest vessels.

Nigeria, a leading oil producer, exports its crude oil for refining and imports refined products due to a lack of operational refineries.

According to the National Bureau of Statistics (NBS) in its Foreign Trade Statistics for Q4 2023, Nigeria spent approximately N12 trillion on petroleum product imports in 2023, an 18.68 per cent increase from the N10 trillion spent in 2022. This highlights the significant economic impact the Dangote Refinery could have by reducing import reliance and strengthening the local economy.

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