In a significant accusation, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited (DIL), has claimed that International Oil Companies (IOCs) operating in Nigeria are actively undermining the Dangote Oil Refinery and Petrochemicals project.
Speaking to a gathering of Energy Editors at a one-day workshop organized by the Dangote Group, Edwin detailed how these companies are allegedly manipulating crude oil prices and obstructing the refinery’s progress.
Edwin accused the IOCs of deliberately inflating the prices of local crude oil, making it nearly impossible for the Dangote refinery to procure supplies at reasonable rates.
“While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is doing its best to allocate crude for us, the IOCs are willfully frustrating our efforts to purchase local crude,” Edwin stated. He highlighted that the IOCs’ actions have compelled the refinery to source crude from distant countries, such as the United States, thereby escalating production costs.
The Dangote refinery, a flagship project aimed at revolutionizing Nigeria’s oil industry, has faced numerous challenges. Edwin recalled a recent meeting convened by the NUPRC with crude oil producers and refinery owners in Nigeria.
This meeting was intended to ensure compliance with the Domestic Crude Oil Supply Obligations (DCSO) as outlined under section 109(2) of the Petroleum Industry Act (PIA). Despite these regulatory efforts, Edwin argued that the IOCs remain determined to see the Dangote refinery falter.
“It seems that the IOCs’ objective is to ensure that our Petroleum Refinery fails,” Edwin said. He elaborated on the tactics employed by these companies, stating, “They are either demanding exorbitant premiums or claiming that crude is simply unavailable. At one point, we had to pay $6 above the market price.”
This pricing manipulation has led to significant operational setbacks for the Dangote refinery. Forced to reduce output, the refinery has had no choice but to import crude oil from far-off regions, significantly driving up production costs and affecting the project’s overall viability.
The allegations raised by Edwin highlight the complex and competitive nature of the oil industry in Nigeria, where domestic players often find themselves at odds with established international entities.
The Dangote Group’s commitment to overcoming these hurdles remains steadfast, as they seek to ensure the success of what is touted to be one of the largest oil refineries in Africa.
As the situation unfolds, stakeholders in Nigeria’s energy sector are keenly watching the developments, recognizing the potential implications for the country’s economic and industrial landscape.
The Dangote refinery, once operational at full capacity, is expected to significantly reduce Nigeria’s dependency on imported refined petroleum products, marking a major milestone in the nation’s pursuit of energy self-sufficiency.
