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Dangote Passes Death Sentence On NNPC Refineries

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The President of the Dangote Group, Alhaji Aliko Dangote, has expressed his doubts over the possibility of the state-owned Port Harcourt, Warri, and Kaduna refineries functioning again.

Dangote also observed that the refineries, which are under the management of the Nigerian National Petroleum Company Limited (NNPCL), had gulped up to $18bn, without coming alive.

The billionaire businessman spoke on Thursday while hosting members of the Global CEO Africa from the Lagos Business School, after a tour of the Dangote Petroleum Refinery in Lekki, Lagos.

According to Dangote, the 650,000-capacity Dangote refinery, which he built after the government of late President Umar Yar’adua aborted his acquisition of the government refineries now has over 50 percent of its output dedicated to Premium Motor Spirit (PMS) also known as petrol.

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He pointed out that even government refineries committed just 22 percent of their production to petrol.

Dangote recalled how he and his team had to return the refineries to Yar’adua, a few months after former President Olusegun Obasanjo left office in 2007.

According to him, the former managers of the refinery had told Yar’Adua that Obasanjo sold the facilities below their costs as a parting gift to him.

“The refineries that we bought before, which were owned by Nigeria, were doing about 22 percent of PMS. We bought the refineries in January 2007. Then we had to return them to the government because there was a change of government.

“And the managing director at that time convinced Yar’adua that the refineries would work. They said they just gave them to us as a parting gift or so. And as of today, they have spent about $18bn on those refineries, and they are still not working. And I don’t think, and I doubt very much if they will work,” he said.

According to Dangote the turnaround maintenance of the refineries could be likened to trying to modernise a car built 40 years ago, after technology had advanced.

“(The turnaround maintenance) is like you trying to modernise a car that was built 40 years ago, when technology and everything have changed. Even if you change the engine, the body will not be able to take the shock of that new technology engine,” he stated.

Dangote’s comment buttressed Obasanjo’s comments last year about the refineries, two of which were shut down again after they were declared operational by the former NNPC Group Managing Director, Mele Kyari, in Q4 2024.

Obasanjo had stated that the NNPCL was aware that it could not operate the refineries, saying international oil companies like Shell once refused to run the facilities when he requested them to do so.

According to Obasanjo, some Nigerians, including Aliko Dangote, once paid $750m to take over the refineries; however, his successor, Yar’adua, aborted the deal.

“I ran to him (Yar’Adua), I said, ‘You know this is not right’. He said, ‘Well, NNPC said they can do it.’ I said, ‘NNPC cannot do it,’ I told my successor that ‘the refineries, from what I heard and know, will not work and when you want to sell them, you will not get anybody to buy them at $200m as scrap’. And that is the situation we are in.

“So, why do we do this kind of thing to ourselves? NNPC knew that they could not do it, but they knew they could eat and carry on with the corruption that was going on in NNPC. When people were there to do it, they put pressure. In a civilised society, those people should be in jail,” Obasanjo had stated.

Again, in January, Obasanjo said, “I was told not too long ago that since that time, more than $2bn have been squandered on the refineries and they still will not work.

“If a company like Shell tells me what they told me, I will believe them. If anybody tells you now that it (the refinery) is working, why are they now with Aliko (Dangote)? And Aliko will make his refinery work; not only make it work, he will make it deliver.”

Obasanjo concluded with a Yoruba proverb, comparing inflated claims about the refineries’ performance to a farmer who planted 100 heaps of yam but falsely claimed to have planted 200.

“They say that after he has harvested 100 heaps of yams, he will also have 100 heaps of lies. You know what that means,” he said.

Calls for the privatisation of the government-owned refineries, under the management of NNPCL, intensified following the recent shutdown of the 60,000 barrels-per-day old Port Harcourt refinery, six months after it was declared operational.

The Warri refinery was also shut down one month after the former Group Chief Executive Officer of the NNPCL, Mele Kyari, declared it open in December.

In the same vein, the Manufacturers Association of Nigeria (MAN) is of the view that the refineries were a drain on the country’s economy, calling on the Federal Government to sell off the facilities.

Likewise, crude refiners also advised the government to sell the refineries as scrap and use the proceeds to fund modular refineries, saying the facilities were a burden and liability to the government.

Recall that the Federal Government has consistently expended resources on the refineries, which went moribund many years ago.

It was gathered that $1.4bn was approved for the rehabilitation of Port Harcourt refinery in 2021; $897m was earmarked for Warri and $586m for Kaduna refineries.

N100bn was reportedly spent on refinery rehabilitation in 2021, with N8.33bn monthly expenditure. $396.33m was spent on Turnaround Maintenance between 2013 and 2017. Despite all the financial allocations, the refineries remain unproductive at the moment.

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Guinness Nigeria CEO Shares Sustainable Growth Strategy

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Guinness Nigeria Plc is focused on sustaining growth through wider product availability, commercial expansion and disciplined pricing.

Managing Director and Chief Executive Officer, Guinness Nigeria, Girish Sharma made the disclosure in an interview with CNBC Africa, in which he outlined the priorities expected to shape the company’s performance in the coming quarters.

According to Sharma, the company would keep focusing on making its products more accessible to consumers while strengthening its presence across markets and distribution channels.

“The strategy has always been growing by being available at more places, having our beer, having our products cold in a lot of places and ensuring that we are playing at the right price points,” he said.

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Sharma explained that the company’s approach was centred on expanding its reach rather than relying on price increases to drive growth.

He said Guinness Nigeria had increased the number of locations and cities in which its products were available, alongside growth in its distributor network.

He maintained that the company’s commercial expansion is part of a longer-term plan that will continue over the next three to five years.

“In terms of number of touch points where we’re available to the Guinness Nigeria products, number of cities where we’re available today, number of distributors that we have that distribute our products today, on every single count we have grown multi-fold,” Sharma said.

He described the expansion as a significant undertaking for the business, noting that the effort began with his first 100-day plan and remains a key part of the company’s direction.

Sharma also pointed to operational discipline and improvements made over the past year as important foundations for the business. He said earlier decisions to address the balance sheet, adjust pricing and make fundamental corrections were now supporting the company’s growth trajectory.

He added that teams across operations and procurement were working to keep price increases to a minimum while increasing output, while a more stable currency environment had also been helpful.

Looking ahead, Sharma said the company would focus on maintaining consistency rather than promising a particular growth rate for the next quarter.

“I’m not here to stand and say that we’re going to do better than the third quarter, but what I see is we will be consistent in terms of delivering healthy results,” he said. “Consistency is the word.”

He also highlighted the importance of the final quarter of the year to the beverage industry, citing increased consumer activity around the festive season. Guinness Nigeria, he said, had strategic partnerships planned across the period, with some extending into the first quarter of the following year.

Sharma said the company’s broader ambition was to build a stronger business capable of funding its growth, rewarding shareholders and sustaining performance over time.

“The business is sturdy, business is strong, business is good, and I’m confident that we will continue to grow sustainably,” he said.

His comments underline Guinness Nigeria’s focus on extending its market reach, strengthening execution and building consistency as it pursues its longer-term growth ambitions.

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NLNG: Nigeria’s Oil Ambitions Require Investor Guarantees

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Nigeria must be surefooted to attract the right investment to harness her full potential in the oil and gas industry.

At the 32nd Nigerian Economic Summit (NES) during a panel session titled, “Unlocking Nigeria’s Oil Potential: The Push for More Oil”, in Abuja, the Managing Director and Chief Executive Officer of NLNG, Adeleye Falade, decried the lack of certainties in the investment environment in Nigeria’s oil industry.

He traced Nigeria’s inability to attract sufficient financing for major oil and gas projects to uncertainties over investment terms, project execution and guaranteed markets for output.

According to Falade, investors and lenders must be confident that contractual agreements will be honoured, projects will deliver as planned and buyers will be available to purchase production before committing billions of dollars to capital-intensive energy developments.

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He cited the financing of NLNG’s Train 7 expansion as evidence that investment certainty, a proven delivery record and credible commercial agreements could unlock substantial funding, even under challenging global economic conditions.

Falade explained that projects requiring huge upfront capital and 20 to 30 years to recover investments depend on confidence that the terms underpinning them will remain stable throughout their lifespan.

According to him, lenders assess not just the quality of an oil or gas resource but also the durability of the investment framework, the predictability of future earnings and the capacity of project sponsors to meet their obligations.

Falade pointed to the $3 billion in external financing secured from 31 local and international financial institutions for Train 7 in 2020, at the height of the COVID-19 pandemic, as proof of the importance of a credible investment proposition.

The project is being financed through a combination of internally generated cash flows and external funding, underpinned by NLNG’s record of developing six operating trains and repaying the loans used to finance their construction.

He said that track record gave lenders tangible evidence of the company’s capacity to execute complex projects and honour financial commitments, reducing the uncertainty that often discourages investment in capital-intensive developments.

He noted that each successful expansion strengthened NLNG’s credibility and positioned it to secure subsequent financing on more competitive terms.

He identified three fundamental questions that lenders seek answers to before financing major energy projects: “Who buys the product? Who carries the risk? Who stands behind the project?”

For NLNG, he said, long-term sales and purchase agreements, some spanning 20 years, provide the commercial foundation required to secure funding before a final investment decision is taken.

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OTL Africa Urges ECOWAS to Adopt Regional Standardisation

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A call has gone to West African countries to adopt uniform fuel specifications, strengthen testing capacity, address infrastructure gaps and improve enforcement systems to facilitate more effective regional petroleum trade.

This formed the bulk of the submission of petroleum regulators at a panel session during the 20th OTL Africa Downstream Energy Week that ended in Lagos.

It is the considered opinion of the regulators that inconsistencies in standards across the region remain a huge disservice to fair competition. Therefore, they expressed a common view that putting in place an acceptable standard will ensure a harmonised fuel quality, improve infrastructure and stronger regulatory coordination which will facilitate cross-border trade and reduce market barriers across the region.

Speaking at the session themed: “Regulatory Convergence in African Oil and Gas Markets,” the Authority Chief Executive (ACE), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Rabiu Umar, argued that differences in fuel specifications across countries made it difficult to compare products and ensure fair competition.

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For instance, he explained that the disparity between diesel specifications of 50 parts per million (ppm) and 1,500 ppm, presents a complication in efforts to harmonise standards across the region.

To this end, the ACE said the sub regional countries needed common product specifications and coordinated production rules to facilitate trade and promote competition.

Umar also advocated the establishment of a West African reference price for petroleum products, saying regional markets needed to strengthen trade among African producers.

On his part, the Chief Executive Officer of Ghana’s National Petroleum Authority (NPA), Godwin Tameklo, said that inadequate infrastructure was a major constraint to regional petroleum trade.

According to him, countries needed to address infrastructure gaps, regulatory differences and market constraints to improve the cross-border movement of petroleum products.

For instance, he disclosed that Ghana’s port and storage facilities could not always accommodate volumes delivered by larger vessels, forcing operators to consider smaller shipments or alternative arrangements.

Tameklo also stressed the need for clear implementation timelines to ensure that regional harmonisation initiatives translated into practical results.

In a similar vein, the Director of Water, Petroleum and Electricity at The Gambia’s Public Utilities Regulatory Authority (PURA), Musa Njie, highlighted the importance of laboratory facilities in testing petroleum product quality.

Njie identified the absence of a laboratory for petroleum product testing as one of the challenges facing The Gambia, and stressed the need to strengthen national quality assurance systems.

He said that harmonisation efforts should protect public health and the environment while improving market efficiency.

Njie also called for stronger coordination between regional frameworks and national regulatory institutions to ensure effective implementation of agreed standards.

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