S&P Global, an international financial analytics corporation, has highlighted the transformative potential of the 650,000 barrels per day (bpd) Dangote Oil Refinery and Petrochemicals company in resolving Nigeria’s foreign exchange (forex) issues and alleviating the pressure on the local naira currency. This observation was made during an onsite visit to the Dangote Refinery at Ibeju-Lekki, Lagos, as part of S&P Global’s sovereign credit ratings assessment of Nigeria. The delegation from the international rating agency was accompanied by officials from the Federal Ministry of Finance.
S&P Global emphasized that the largest single-train refinery complex in the world is expected to significantly bolster Nigeria’s oil sector and positively impact the country’s economy. Ravi Bhatia, director and lead analyst of sovereign and international public finance ratings at S&P Global Ratings, led the delegation to Lagos and asserted that the Dangote refinery would transform Nigeria into a net exporter of petroleum products. This shift is anticipated to boost revenue generation and mitigate the existing pressure on the country’s foreign exchange reserves.
“It is a very impressive facility, able to process 650,000 barrels a day when at full capacity. It is the largest single-train refinery complex in the world. It came out quite quickly. Nigeria is a big exporter of crude but has issues with importing refined fuels. So, there is a gap in the market where crude can be refined in Nigeria, save money that way, and potentially save some foreign exchange. This will be positive for the economy in the medium term. It looks positive from our assessment,” Bhatia remarked after an extensive tour of the facility.
During a media interaction, Devakumar Edwin, vice president of Oil and Gas at Dangote Industries Limited (DIL), who led the tour, reiterated that by harnessing Africa’s abundant crude oil resources to produce refined products locally, the company aims to initiate a cycle of industrial development, job creation, and economic prosperity. He also confirmed that the production of premium motor spirit (PMS) would commence in July.
Edwin highlighted that the $20 billion facility’s products are of high quality and meet international standards, capable of fulfilling 100 percent of Nigeria’s demand for petrol, diesel, kerosene, and aviation jet fuel, with a surplus available for export.
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 that ensures smooth automation of operations. The team from the international rating agency included Associate Director of Sovereign Ratings, Maxmillian McGraw; Director of Corporate Ratings, Omegu Collocott; Senior Analyst of Bank Ratings, Charlotte Masvongo; and Director of Financial Services, Samira Mensah.
Currently, the refinery operates at a capacity of 350,000 barrels per day, with plans to scale up to at least 500,000 barrels per day by July/August, initiating the refining of petrol and ultra-low sulfur diesel. Edwin noted that the refinery is designed to process a wide range of crudes, including various African and Middle Eastern crudes, as well as US Light Oil, and meets Euro V specifications. It also complies with the US EPA, European Union (EU) emission norms, the Department of Petroleum Resources (DPR) emission/effluent norms, and the African Refiners and Distribution Association (ARDA) standards.
Edwin also pointed out the unique achievement of a Nigerian company designing and constructing the world’s largest single-train refinery complex while acting directly as its own Engineering, Procurement, and Construction (EPC) contractor. The refinery includes a self-sufficient marine facility capable of handling the world’s largest vessels. “The refinery can produce the best quality products in the world, Euro V grade. It is one of the energy-efficient refineries and it is highly environmentally friendly. It is sophisticated with a high level of automation. The largest single-train refinery in the world is 100 percent designed, engineered, and constructed by a Nigerian company as an EPC contractor,” he said.
Despite being one of the world’s leading oil producers, Nigeria exports all its crude oil for refining and subsequently imports refined products due to a lack of operational refineries. It is estimated that Nigeria imports at least 50 million liters of petrol per day to meet domestic demand. According to data from the National Bureau of Statistics (NBS) in its Foreign Trade Statistics for the Fourth Quarter of 2023, Nigeria spent approximately N12 trillion on the importation of petroleum products in 2023, including premium motor spirit (PMS), commonly known as petrol. This figure represents an 18.68 percent increase compared to the N10 trillion spent on fuel imports in 2022.
