Business
Dangote Refinery Can Solve Nigeria’s Forex Problems, Catalyse Economic Devt – S&P Global
. . . As Dangote Reassures On Commencement Of Petrol Production This July
International financial analytics corporation, S&P Global, has described the 650,000 barrels per day (bpd) Dangote Oil Refinery and Petrochemicals company as capable of resolving Nigeria’s foreign exchange (forex) issues and its huge pressure on the local currency, Naira, while also catalysing the country’s economic development.
S&P Global, headquartered in Manhattan, New York City, disclosed this during an onsite visit to the Dangote Refinery at Ibeju-Lekki, Lagos as part of its sovereign credit ratings assessment of Nigeria. The team from the international rating agency were accompanied by officials from the Federal Ministry of Finance.
S&P noted that the largest single-train refinery complex in the world would bolster Nigeria’s oil sector and, more importantly, also have a positive impact on its growing economy.
Director and Lead Analyst, Sovereign and International Public Finance Ratings, S&P Global Ratings, Ravi Bhatia, who led the delegation to Lagos, said Dangote refinery would transform Nigeria into a net exporter of petroleum products.
ALSO READ: Economic Conspiracy: Dangote Accuses IOCs Of Plotting Against Nigerian Refinery
He added that this transformation is expected to boost revenue generation and alleviate the current pressure on the country’s foreign exchange reserves.
“It is a very impressive facility, able to process 650,000 barrels a day, when in full capacity. It is the largest single-train refinery complex in the world. It came out quite quickly. Nigeria is a big exporter of crude but has issues with importing refined fuels.
So, there is a gap in the market where crude can be refined in Nigeria, save money that way, and potentially save some foreign exchange. This will be positive for the economy in the medium term. It looks positive from our assessment,” Bhatia said.
Also, in a chat with the media, Vice President of Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin, who led the team during the tour of the facility, reiterated that by harnessing Africa’s abundant crude oil resources to produce refined products locally, the company aims to catalyse a virtuous cycle of industrial development, job creation, and economic prosperity.
He also revealed that, as earlier promised, the company will start the production of premium motor spirit (PMS), this month (July).
Noting that products from the $20 billion facility are of high quality and meet international standards, Edwin said it can meet 100 percent of Nigeria’s demand for petrol, diesel, kerosene, and aviation Jet, with surpluses available for export.
The S&P team commended the President of Dangote Industries Limited, Aliko Dangote, for integrating advanced technologies and quality control measures, including a state-of-the-art Central Control Unit ensuring smooth automation of operations.
Other members of the team of the international rating agency include the Associate Director, Sovereign Ratings, Maxmillian McGraw; Director, Corporate Ratings, Omegu Collocott; Senior Analyst, Bank Ratings, Charlotte Masvongo, and Director, Financial Services, Samira Mensah.
Currently operating at 350,000 barrels per day capacity, Edwin said the refinery is slated to scale up to at least 500,000 barrels per day capacity by July/August, commencing the refining of petrol and ultra-low sulphur diesel.
He noted that the refinery, designed to process a wide range of crudes including various African and Middle Eastern crudes, as well as US Light Oil, conforms to Euro V specifications.
In addition, it is designed to comply with US EPA, European Union (EU) emission norms, the Department of Petroleum Resources (DPR) emission/effluent norms, and the African Refiners and Distribution Association (ARDA) standards.
While noting that most refineries were built by foreign companies, he said it is a thing of pride that a Nigerian company designed and built the world’s largest single-train refinery complex while acting directly as its own Engineering, Procurement, and Construction (EPC) contractor.
The refinery also incorporates a self-sufficient marine facility capable of handling the world’s largest vessels.
“The refinery can produce the best quality products in the world, Euro V grade. It is one of the energy-efficient refineries and it is highly environmentally friendly. It is sophisticated with a high level of automation. The largest single train refinery in the world is 100 per cent designed, engineered, and constructed by a Nigerian company as EPC contractor,” he said.
Nigeria, one of the world’s leading oil-producing countries, exports all its crude oil for refining and subsequently imports refined products due to a lack of operational refineries. It is estimated that Nigeria imports at least 50 million litres of petrol per day to meet domestic demand.
According to data from the National Bureau of Statistics (NBS) in its Foreign Trade Statistics for the Fourth Quarter of 2023, Nigeria spent approximately N12 trillion on the importation of petroleum products in 2023, including premium motor spirit (PMS), commonly known as petrol. This figure marks an 18.68% increase compared to the N10 trillion spent on fuel imports in 2022.
Savannah Energy has shared a trading update on its Nigerian operations and other markets in Africa, including up-to-date cash collections in its Nigerian business.
According to the update, made available on Thursday in Lagos, its gross production in Nigeria averaged 23.1 Kboepd for FY 2024, broadly in line with the prior year’s 23.6 Kboepd, of which 88% was gas (FY 2023: 91%).
On the update, CEO of Savannah Energy, Andrew Knott, said, “I am pleased to provide a FY trading update which demonstrates the continued progress we have made in 2024, a year which saw the highest level of cash collections ever recorded by our Nigerian business. 2025 is expected to be an exciting year for our Company: we have a large planned operational programme in Nigeria which is anticipated to enhance both our oil and gas production levels and capacity; we intend to progress our R3 East oil development project in Niger; we continue to pursue key acquisitions in the upstream oil and gas space; and we continue to seek to build our power business.
“Fundamentally, Savannah remains unequivocally an “AND” company, seeking to deliver strong performance both for the short AND long term across multiple fronts, and pursuing growth opportunities in both the hydrocarbon AND power sectors.”
The update It also shows that it generated a Total Income of US$393.6 million in 2024, compared to FY 2023’s US$289.8 million. This consists of Total Revenues of US$258.7 million and Other operating income of US$134.9 million.
The report also shows that Savannah’s FY 2024 Total Revenues were ahead of the previously issued financial guidance of greater than US$245 million, while FY 2024 financial guidance is reiterated for Operating expenses plus administrative expenses at ‘up to US$75 million’. The company expects its FY 2024 capital expenditure to come in lower than planned (previously guided at ‘up to US$50 million’) due to the phasing of spend.
ALSO READ: CSR: Dangote Awards Scholarships To 473 Students
According to the update, Savannah’s cash collections in 2024 amounted to US$248.5 million, a slight increase from the US$206 million it received in 2023. The report further shows that its cash balances as at 31 December 2024 stood at US$32.6 million, compared to the 31 December 2023 figure of US$107.0 million.
The report shows that the company’s midstream subsidiary, Accugas Limited, had as at 31 December 2024 drawn down on its NGN332 billion of the NGN Transitional Facility, with the resulting funds being converted to US$, which, along with cash held, was used to partially prepay the existing Accugas US$ Facility, leaving a balance as at 31 December 2024 of approximately US$212.3 million.
The report also provided new updates on Accugas’ US$45 million Uquo Central Processing Facility (“Uquo CPF”) compression project in Nigeria, noting that its commissioning which will enable the expansion of gas production in the medium term is well underway.
The report highlighted the progress being made in the procurement process of long lead equipment in Nigeria for a potential two-well drilling campaign on the Uquo Field in H2 2025, with an additional gas development well expected to add up to 80 MMscfpd of supplemental production capacity and a potential exploration well targeting an Unrisked Gross gas initially in place (“GIIP”) of 154 Bscf (25.7 MMboe) of incremental gas resources.
The update shows that progress is also being made in the planned Savannah acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited, whose principal asset is a 49% non-operated interest in the Stubb Creek oil and gas field (“Stubb Creek”), with regulatory approval and completion being targeted in Q1 2025. Following the completion of the acquisition, Savannah intends to commence an expansion programme which is anticipated to increase Stubb Creek gross production from an average of 2.7 Kbopd in 2024 to approximately 4.7 Kbopd.
In Niger, Savannah continues to seek to progress its 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger, while it continues to push for a potential alternative transaction structure to acquire a material stake in producing oil and gas assets in South Sudan as previously announced on 20 December 2024.
On the renewable energy front, the update shows that Savannah has up to 696 MW of renewable energy projects currently in motion, including the up to 250 MW Parc Eolien de la Tarka wind farm project in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon. A firm believer in Africa’s transition to renewable energy, Savannah continues to target a portfolio of up to 2 GW+ of power projects in motion by the end of 2026.
The Nigerian Economic Summit Group (NESG) has projected that the country has the potential to achieve a 5.5% growth in Gross Domestic Product (GDP) if critical policy reforms are sustained.
This was disclosed on Thursday during the launch of the NESG’s 2025 Macroeconomic Outlook report.
Speaking at the event, the Chief Economist and Director of Research & Development at NESG, Dr. Olusegun Omisakin, highlighted the need for more efficient policy implementation to unlock Nigeria’s economic potential.
READ MORE: Davido Is Richer Than His Billionaire Father – Ibrahim Chatta Claims
“We believe at the optimal level, if we embark on more efficient policy reforms, the Nigerian economy has the potential, the GDP to end up at 5.5 per cent, and we believe that this is achievable,” Omisakin stated.
More to follow……….
The Central Bank of Nigeria (CBN) has announced the release of the Nigerian Foreign Exchange (FX) Code, a set of guidelines designed to promote ethical conduct among authorized dealers in the country’s FX market.
In a statement, the apex bank disclosed that the official launch of the Code would take place on Tuesday, January 28, 2025, at the CBN Head Office Auditorium in Abuja.
READ MORE: Dangote Denies Culpability In Pumping Up Petrol Price
“The Central Bank of Nigeria has approved the release of the Nigerian Foreign Exchange (FX) Code as a guideline to the banking industry to promote the ethical conduct of authorised dealers in the Nigerian Foreign Exchange Market,” the statement read.
The introduction of the FX Code is expected to enhance transparency, accountability, and professionalism within Nigeria’s foreign exchange ecosystem, aligning it with global best practices.
The event is anticipated to attract key stakeholders in the financial and banking sectors, as well as representatives from authorized FX-dealing institutions across the country.
Tinubu To Attend Africa Heads of State Energy Summit In Tanzania
Italy Collaborates With Edo To Combat Irregular Migration
Terrorism: Police Neutralises ESN Kingpins, Destroys Camps In Imo
JUST IN: Security Beefed Up As Obasa’s Supporters Occupy Speaker’s Lodge
9mobile Commends NCC For 50% Tariff Adjustment To Boost Telecom Sector
Kano Police Warn Residents Of Imminent Terror Attack Threats
OSSG Raises Alarm Over Murder Plot By APC Chieftain
NCC, SMEDAN, NAICOM, SEC, Others Set for SUPERNEWS SMEs Conf June 13
Sahara’s Tonye Cole resigns from GPHCDA
Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option
Oando opens ultra-modern petrol station in Lagos
