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16 Years Later, Dangote Lives His Dream After BlueStar Setback



After Sixteen years of the BlueStar setback, Aliko Dangote’s dream of owning a refinery has now come to fruition.

The decision of the government of Umaru Musa Yar’Adua in 2007 to reverse the sale of the Port Harcourt and Kaduna refineries (two of Nigeria’s moribund refineries) to Blue Star, the Dangote-led consortium, did not go down well with Aliko Dangote, who had earlier paid, through BlueStar, about $670 million for the plants in the twilight of the Obasanjo administration and gone away thinking it was a done deal.

However, six years after the setback, he announced plans to build a private refinery in Lagos with a capacity of 650,000 barrels per day (bpd), which came to fruition yesterday.

Speaking at the inauguration of 650,000 barrels-per-day (BPD) Dangote Petroleum Refinery and Petrochemical Complex in Ibeju-Lekki, Lagos. President Muhammadu Buhari congratulated Dangote Group, saying, “The 650,000 barrels-a-day of crude will enable our country to achieve self-sufficiency in refined products and even have some supplies for export. The government and people of Nigeria are proud of the doggedness and tenacity of Dangote as an entrepreneur.

“This feat at this time of the nation’s economic development clearly makes this event a notable milestone for our economy and the game changer for the downstream petroleum products, not only for Nigeria but the entire African continent. Dangote Group has helped transform our economy from heavy import dependence to a net exporter in some critical industries, including cement and fertiliser.”

The president noted that the economy, which had been stressed for many decades by huge deficits in economic infrastructure and over a decade of insurgency, has also been severely impacted by several external crises, including the global financial crisis, the Coronavirus pandemic and the Russia-Ukraine war.

He went on: “The consequences of these challenges constitute a severe strain on our economy and a limiting government’s ability to provide basic infrastructure without resorting to borrowing. Government therefore decided to focus attention on creating an enabling environment for the private sector to thrive and fill the enormous gap in investments, not only in infrastructure, but also in all critical sectors.

“We recognise that without active participation of the private sector and a strong commitment to public-private partnership, the economy will not be able to continue to meet the challenge and economic growth.”

Buhari expressed the hope that the coming administration would continue to apply such innovative schemes to accelerate the fruition of critical infrastructure, in particular roads and gas pipelines.

On his part, the governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, disclosed that Nigeria spent $23.3bn on petroleum imports in 2022 alone, adding that the figure would have reached $30bn by 2027 if Dangote Refinery had not been built.

Emefiele cited balance of payments statistics and showed that the cost (including freight) of petroleum products imports into Nigeria doubled over a five-year period from about $8.4 billion in 2017 to $16.2 billion (indicating an annual average of $11.1 billion), before rising further to $23.3 billion by end of 2022.

At this rate, he said, the average annual cost of petroleum products imports to Nigeria could reach $30 billion by 2027 if Nigeria continues to rely on petroleum imports. The figures, he stressed, suggest that the refinery could engender foreign exchange savings to the country of between $25 billion and $30 billion annually.

Emefiele said: “The impact of these savings will be directly reflected in Nigeria’s foreign exchange reserves by reducing the pressure on our balance of payments. There are also substantial benefits that we will gain from the export of refined products to the rest of the world. In addition to the nearly $30 billion foreign exchange savings from the reduction in petroleum imports, the economy is projected to benefit an extra $10 billion of foreign exchange inflow annually through the export of refined petroleum products, which will further boost our official reserves and enhance exchange rate stability.”

The refinery complex, he said, includes a refinery, a petrochemical plant, a urea fertiliser plant, and a subsea pipeline project, adding that petrochemical facility has a capacity to produce one million metric tonnes of polypropylene per annum while the urea fertiliser plant will be able to produce three million metric tonnes of urea annually.

Its headline project, the Dangote Refinery, which has the capacity to process 650,000 barrels of crude oil per day, is the largest single-train refinery in the world. Given this processing capacity, the refinery is more than able to meet all of Nigeria’s domestic fuel consumption, which is about 450,000 barrels per day, whilst the excess production will be available for export.

“This will not only aid our domestic petrol needs, but also help in generating export revenues for our country. The refinery is designed to process not only the Bonny Light grade of crude oil, but also process a wide variety of other crude streams, including many from Africa, some Middle Eastern streams, and the US Light Tight oil. More importantly, the Dangote Refinery is equally capable of delivering all types of liquid products, including gasoline, diesel, kerosene, and aviation jet fuel,” he stated.

The project, he stated, was completed with a total of $18.5 billion, with funding distributed into 50 percent equity investment and 50 percent debt finance.

Emefiele said the Central Bank of Nigeria also partnered with the Dangote Group in ensuring the successful completion of the project by providing about N125 billion to cover domestic currency requirements for the venture, adding that the refinery and petrochemical project is a testament to President Buhari’s vision for Nigeria.

“It shows that, regardless of what the world thinks, Nigeria can be self-sufficient in all products that we consume and at the same time export our excess output to the rest of the world,” he said.

According to Emefiele, under the incoming administration of Bola Ahmed Tinubu, Nigeria will cease importing petroleum products, fertiliser and petrochemicals that drained the country of over $26 billion in 2022.

“The self-sufficiency in refined petroleum, urea, and polypropylene, which Nigeria has attained with this project, is a strong testament to how leadership, dedication, focus, commitment, and resilience have helped Nigeria on its drive towards import substitution and export orientation,” he stated.

The CBN governor further noted that the refinery will have an enormous impact on job creation by generating thousands of direct jobs and millions of indirect jobs, with over 135,000 permanent jobs for Nigeria.

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He also disclosed that the project will generate up to 12,000MW of electricity. In addition, the refinery and the other ancillary projects will have significant multiplier effects on other sectors of the economy by supporting a diverse range of sectoral value-chains.

Emefiele added that the project avails Nigeria significant savings both in terms of foreign exchange and in easing the fiscal burden on the federal government.

On his part, the president of the pan-African conglomerate, Dangote Industries Limited (DIL), Aliko Dangote, disclosed yesterday that the newly commissioned 650,000pbd refinery would employ over 100,000 Nigerian youths as well as generate over $21 billion, therefore saving the country huge forex that would have been used for fuel importation. The company, according to him, now has over 33,000 employees.

Much to the excitement of Nigerians, Dangote said the commissioning has marked the beginning of the new journey of self-sufficiency in refined petroleum products and exportation of same just as been achieved in Cement and lately fertilizer.

Dangote lamented that the current fuel crisis has had a negative impact on the nation’s economy and that informed his decision to build a world class refinery that would change the trend, adding that though he faced serious challenges, he, however, decided to trudge on.

He highlighted events leading to his firm deciding to build its own refinery after his attempt to acquire one of the existing moribund ones in the country did not materialize, noting that he decided to change marketing strategy and settle for the most gigantic project ever undertaken by an individual worldwide.

According to him, the refinery plant would be run at the highest effective and efficient level for maximum benefits to all Nigerians.

“We will replicate what we achieved in cement and fertiliser by attaining self-sufficiency and becoming a net exporter,” he said.

Dangote assured Nigerians that 40 per cent of the production capacity will be available for export, with the coming on stream of the plant guaranteeing raw materials for plastic, and pharmaceutical industries.

Similarly, the group managing director of the Nigerian National Petroleum Company Ltd (NNPC), Mele Kolo Kyari, said the NNPC was happy to partner Dangote Refinery because the project had the potential for the smooth supply of petroleum and it would guarantee healthy competition for the benefits of the nation’s economy.

He said the NNPC Ltd. was committed to value addition to the potentialities of the project, noting that the new Petroleum Industry Act will provide security of supply of refined products and protect the plant. The NNPC boss said he was happy the refinery was coming on board at a time when the subsidy on imported products had become unbearable for the government.

In their respective goodwill messages, presidents of Ghana, Senegal, Niger, Benin Republic and Chad expressed satisfaction that the Dangote Refinery will serve the West African region and that their countries would be beneficiaries, saying the Dangote Refinery is an African company for Africa by an African entrepreneur.


Meanwhile, the chairman of Dangote Group, Aliko Dangote confirmed that the first refined crude oil from the factory would hit Nigeria’s local market by end of July and the beginning of August, 2023,

Dangote made the disclosure in his remarks at the official commissioning of the 650,000 barrels daily Dangote Refinery in Lagos yesterday.

He said the facility has a capacity to process 650,000 barrels per day of crude oil (plus 900,000 tonnes of polypropylene) in a single train – which is the largest in the world.



“We have selected the best plants and equipment and the latest technologies from across the world.

“Also, the products slate is designed to meet the highest quality standards of high-value products, including Premium Motor Spirit (PMS), Automotive Gas Oil (Diesel), Aviation Turbine Kerosine (ATK), all of Euro V Standards that will enable the firm meet the country’s demand and also to become a key player in the African and global market,” he explained.


Dangote further stated that the country’s coastal location and offshore loading and offloading (SPM) facilities had the capacity to receive all of its crude oil supplies and evacuate up to 75 per cent of liquid products, which offer the facility direct access to the rest of Africa and the global market for exports.

In addition, 80 per cent of the refinery’s production can be discharged through trucks nationwide.

He noted that the group’s huge investment of over $18.5 billion in the oil and gas industry had been prompted by the desire to support and contribute its quota to the federal government’s sustained effort to transform the economy and properly position the country as a respected member among emerging economies in the world.

“Beyond this, the group intends to ensure that the plants are run at the highest capacity utilisation and highest efficiency to enable us to export competitively to other markets, especially in the ECOWAS and the wider Africa Region in which 53 countries out of 55 are dependent on imports to meet their petroleum products demand.

“This is a clear opportunity for Nigeria given the African Union’s commitment to the creation of an African Common Market through the recently established African Continental Free Trade Area (AFCFTA) regime,” he said.

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