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Nigeria Largest Refinery ‘s Plan – NY Times Report

Nigeria Largest Refinery 's Plan - NY Times Report
Nigeria Largest Refinery 's Plan - Construction workers at the Dangote Oil Refinery, which is being built on the outskirts of Lagos, Nigeria. The $12 billion project is planned as the world’s largest refinery.CreditCreditAkintunde Akinleye/Reuters

Nigeria Largest Refinery ‘s Plan – NY Times Report

Nigeria Largest Refinery ‘s Plan – Mr. Dangote is building a $12 billion oil refinery on 6,180 acres of swampland that, if successful,— could transform Nigeria’s corrupt and underperforming petroleum industry. It is an entrenched system that some say has contributed to millions languishing in poverty and bled the “giant of Africa’’ for decades.

Nigeria Largest Refinery 's Plan - NY Times Report
CAPTION: Nigeria Largest Refinery ‘s Plan – Construction workers at the Dangote Oil Refinery, which is being built on the outskirts of Lagos, Nigeria. The $12 billion project is planned as the world’s largest refinery. CreditCreditAkintunde Akinleye/Reuters

It is here in this vibrant metropolis of 21 million people that Africa’s richest person, Aliko Dangote, is undertaking his most audacious gamble yet. Planned as the world’s largest refinery, Mr. Dangote’s project is set in a free-trade zone between the Atlantic Ocean and the Lekki Lagoon, an hour outside the city center. The site employs thousands, and upon completion — Mr. Dangote says in 2020; some analysts suggest more likely in 2022 — should process 650,000 barrels of crude oil daily.

That’s enough oil to supply gasoline and kerosene to all 190 million Nigerians and still have plenty to export. By the end of this year, the facility is expected to churn out three million tons of fertilizer. The production of diesel, aviation fuel and plastics will then follow.

“The construction site is already a huge beehive of activities, with workers, local and foreign, hard at work. It is going to be the largest manufacturing plant of any sort in Lagos,” said Kayode Ogunbunmi, the publisher of City Voice, a Lagos daily newspaper and lifelong Lagos resident.

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Indeed, some 7,000 employees are working around the clock on the site, many arriving by private ferry from the city center. Another 900 Nigerian engineers and technicians are being trained abroad for jobs at the refinery. Mr. Dangote, whose net worth is estimated at $11.2 billion, has had to build a port, jetty and roads to accommodate this project, along with new energy plants to power it all.

Nigeria’s government, despite being a longtime crude oil exporter, has four underperforming and frequently broken down refineries with a combined capacity of 445,000 barrels daily. Those refineries — two in the oil hub of Port Harcourt, one in Warri in the Niger Delta, and the other in the northern city of Kaduna — are all operating at less than 50 percent of capacity.

Which means that even though Nigeria is Africa’s largest oil producer, petroleum for everyday use must be imported. This has spawned fuel importers and diesel traders who have grown extremely wealthy. Nigeria’s government subsidizes fuel imports to keep pump prices low, and this has contributed to Nigeria’s well-documented culture of petroleum industry corruption.

“The failure to produce refined products over the last 25 years has created a huge architecture of graft and corruption around everything,” said Antony Goldman, the co-founder of the London-based Nigeria specialists ProMedia Consulting.

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Mr. Goldman does political risk analysis in West Africa and has been working in and out of Nigeria for two decades. Corruption, he explained, stems from illegal refineries and the local criminal network that helps transport illegal crude out of the country. Both elements, he said, have not been sufficiently challenged by the government or law enforcement agencies, which has further contributed to Nigeria’s entrenched oil industry corruption.

“A refinery that actually works and can meet Nigeria’s refined product requirement? It’s a game changer,” Mr. Goldman added. But change, no matter how positive, is potentially destabilizing. “These are not people who relinquish things without a fight,” Mr. Goldman said of Nigeria’s fuel import merchants.

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