$8bn refinery proposed by Africa's
richest man and President, Dangote Group,
Alhaji Aliko Dangote, would be located at
the Olokola Free Trade Zone, Ondo State.
A senior official of the company, who
asked not to be named because he was not
authorised to speak on the matter, told
our correspondent that the refinery would
be located in the OFTZ.
One of the factors considered for the
location of the refinery, according to
the source, is that it is the biggest
deep seaport in the country and other big
industries are located there; besides,
Ondo is one of the oil producing states
in the country.
The source added that stable crude oil
supply was also a vital element in the
choice of the location for the refinery
because Chevron and a number of other oil
producers had oil fields in the oil-rich
region of the state.
On why Lagos was not chosen, industry
analysts said though the state was a
coastal state, Dangote would have to
build pipelines to transfer crude from
oil fields to the refinery, thereby
incurring additional expenses.
The source explained that necessary
approvals had been secured for the
refinery, adding that the Dangote Group
was just waiting for the necessary
equipment with which to build the
refinery to arrive.
Another source told our correspondent
that Dangote, who was listed on Monday as
the first African entrepreneur to lay
claim to a $20bn fortune and one of the
25 richest men in the world, would put
down $4bn of his personal fortune to
build the refinery, while international
financial institutions had raised the
balance.
Dangote had in April announced plans to
invest up to $8bn in building an oil
refinery with capacity for around 400,000
barrels a day by late 2016.
The capacity, experts had said, would
almost double Nigeria's current refining
strength.
"This will really help not only Nigeria
but sub-Saharan Africa. There has not
been a new refinery for a long time in
sub-Saharan Africa," Dangote had told
Reuters in a telephone interview.
Nigeria currently has the capacity to
produce some 445,000 barrels per day in
four refineries, which operate well below
that owing to decades of mismanagement
and corruption in Africa's leading energy
producer.
The country relies on subsidised imports
for 80 per cent of its fuel needs.
Dangote said the country's ability to
import fuel would soon be challenged.
"In five years, when our population is
over 200 million, we won't have the
infrastructure to receive the amount of
fuel we use. It has to be done," he said.
Past efforts to build refineries have
often been delayed or cancelled, but
analysts have said Dangote should be able
to build a profitable Nigerian refinery,
owing to his past successes in industry
and his strong government connections.
Analysts have said previous attempts to
get the refineries going were held back
by vested interests such as fuel
importers profiting from the status quo.
"The people who were supposed to invest
in refineries, who understand the market,
are benefiting from there being no
refineries because of the fuel import
business. Some are going to try to
interfere," Dangote said.
He said making a new refinery run at a
profit would work even if the government
failed to scrap the subsidised fuel price
that has deterred others from investing.
"We've done our numbers and the numbers
are okay," he said.
Dangote, who spoke on the sidelines of
the recent World Economic Forum on Africa
in Cape Town, South Africa, said he had
secured $4.25bn loans from banks to build
the refinery.
He said the loan was secured from "two
offshore banks and some Nigerian banks."
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