A senior cousin of mine died recently, aged 96. During the condolence visit to his family, the wife, aged 89, kept repeating to every visitor: “The wicked have done their worst”. To me, it was absolutely hilarious.
But, none of us, younger, was so uncouth as to laugh in my auntie’s face.
On many occasions, our refusal to face the truth starring us in the face, is also a form of corruption.
We thereby avoid having to take the difficult decisions required to make real progress. Dangote Refinery is the most obvious case study.
But, it is not the only one. Permit me to make a categorical statement which anybody not self-delusional should be able to figure out for themselves.
Anybody includes Alhaji Aliko Dangote, GCON. The refinery will not receive 650,000 barrels of crude from Nigeria for a long time to come – if ever.
The reasons are so clear that only corruption of thought prevents the Federal Government, the Nigerian National Petroleum Company Limited, NNPCL and Dangote, as well as his supporters, from admitting the truth.
Crude Production And Commitments Make It Impossible
“Producers decline sale of 460,000bpd to Dangote, others.”
Report, August 21, 2024.
If Dangote wants to know who “the wicked who have done their worst” are, he would have to start from the Presidency, to the Ministry of Petroleum Resources to NNPCL.
In one way or another, they delivered the dagger thrusts in the back to Dangote, despite his generous contributions to their campaigns.
Self-righteous Obasanjo, as usual, established the template fusing the office of President with that of Minister of Petroleum Resources.
He performed woefully on both and left a great legacy of corruption in the two roles.
One of the precedents he left behind, making it impossible for Dangote Refinery to ever receive 650,000bpd day of crude from Nigeria’s production was the mandatory allocation of crude oil to NNPC’s four refineries as the table below clearly indicates.
NNPC’s Crude Oil Processing Capacity
REFINERY YEAR INSTALLED
COMMISSIONED CAPACITY
Port Harcourt I 1965 35,000 bpd
Expanded 1971 60,000 bpd
Warri 1979 125,000 bpd
Kaduna 1980 110,000 bpd
Port Harcourt II 1989 150,000 bpd
TOTAL 445,000 bpd
Sources: NNPC 2000; PDP: CORRUPTION INCORPORATED pp 284-5
Those in government were already aware that 445,000 bpd was already committed to the four scraps we call refineries when Dangote went to discuss with them about his refinery needing 650,000 bdp.
JANUARY – JULY CRUDE PRODUCTION
“Oil production fell in Q2 – NBS.” Report, August 28, 2024.
The report informed those who want facts instead of fiction, that “The nation in the second quarter of 2024 recorded an average daily production of 1.41 million barrels per day.”
In the first quarter, the production was 1.57 mbpd. Several questions arise.
First, with a firm commitment to refineries of 445,000 bpd, how much will be left for the Federal Government, if 650,000 bpd is allocated to the Dangote Refinery?
Furthermore, with several other Nigerian refineries springing up, and just as entitled to Nigerian crude, how many more thousands of crude would eventually be allocated to domestic refineries?
Remember that 1.095mbpd would have been required to meet the requirements of just NNPC and Dangote refineries – leaving only 315,000 bpd.
Are the 315,000 free for the Federal Government to export and earn badly needed foreign exchange?
The clear answer is NO; and the Federal Government, NNPCL and Dangote are aware of this.
To start with, not all the 1.41mbpd belongs to the Federal Government or NNPCL.
In fact, less than half is theirs. So, all that the Dangote Refinery could have legitimately counted on receiving, if it started operations in December 2023, as previously advertised, would have been less than 300,000bpd.
Unfortunately, even that volume would not be consistently delivered to the refinery. Here is why.
Dangote Swindled By Buhari And NNPCL
“It was beautiful and simple; as all truly great swindles are.”
O Henry, 1862-1910. VBQ p 239.
Alhaji Dangote is no fool; otherwise he could not have become the richest man in Africa for years.
But, even the best in every game sometimes blunder. Dangote consulted with all the people that mattered in the Buhari government before embarking on the project.
The most important individual was the Minister for Petroleum Resources; who also was the President – Buhari.
He must have been assured of supply of 650,000bpd before proceeding. He believed them. That might turn out to be his greatest mistake in an otherwise string of astonishing successful decisions.
He was probably assured that Nigeria would be producing 2 million barrels per day by the time the refinery was ready for supplies.
He believed them. Deliberately, it was not disclosed that 400,000bpd was being stolen and there was no respite in sight.
They also “forgot” to tell him about 445,000bpd committed to NNPCL refineries.
Furthermore, the Buhari administration had borrowed huge amounts of money, undisclosed to Nigerians, using future crude oil produced as collateral.
Reliable insiders inform me that nearly 300,000bpd is involved in those deals. Finally, as pointed out before, less than half of crude produced in Nigeria belongs to the Federal Government.
So, even if the country produces 2mbpd, only 1mbpd belongs to the Federal Government. Add up all the commitments; and it should be clear that, had the Federal Government been an individual, it stands accused of 419. Yet, Dangote believed them; even as he was being serially swindled.
“Producers decline sale of 460,000bpd crude to Dangote.” Report, August 21, 2024. So, where will 650,000bpd come from to supply Dangote?
Unforeseen Problems
Dangote must have dismissed the possibility of competitors once his giant refinery was approved. The assumption was understandable.
With a refinery with 650,000bpd of crude oil processing capacity, and the crude oil supply guaranteed, there would be no need for another refinery.
At any rate, there would be no domestic crude for any challenger to process. Well, that has turned out to be a wrong assumption.
At least four other refineries are ready to go; and they also are requesting for crude supply from the Federal Government as a matter of right.
The Federal Government /NNPCL has a whale of a problem on their hands regarding finding the crude to supply the new refineries.
NNPCL has also taken loans; using future crude as collateral. That will not be available for allocation to Dangote refinery.
Virtually all the independent crude producers operate with loans to be repaid with future crude production.
Source: independent
