Billions wasted on broken refineries - Africa's richest man tells his side of the story
Aliko Dangote expressed skepticism about the Nigerian government's capability to restore state-owned oil refineries.
His personally constructed Dangote Refinery has a processing capacity of 650,000 barrels per day.
He detailed the inefficiencies in managing refineries, referencing extensive financial mismanagement.
Dangote, CEO of the Dangote group recently called into question the likelihood of the state-owned Port Harcourt, Warri, and Kaduna refineries being operational again.
He did this at his own oil refinery, where he gave members of the Global CEO Africa from the Lagos Business School a tour of the facility while highlighting the ludicrous amount already spent on reviving the state-owned refineries.
Dangote specified that his refinery, which he initiated after the country's 16th head of state, the late President Umar Yar'adua's cancelled his plans to acquire government refineries, now produces more than 50% of its output in the form of Premium Motor Spirit (petrol), while even government refineries only devote 22% of their output to this product.
'The refineries that we bought before, which were owned by Nigeria, were doing about 22 per cent 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,' he stated.
'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 added.
The Nigerian billionaire emphasized that the refineries' turnaround maintenance was similar to attempting to update a car that was manufactured forty years ago, even though technology had since evolved, as reported by the Punch.
'(The turnaround maintenance) is like you trying to modernize 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 elaborated.
Dangote's statement corroborated the claims of Yar'adua predecessor, former president Olusegun Obasanjo last year on the refineries, two of which were closed when Mele Kyari, the former NNPC Group Managing Director, declared them open.
The NNPC understood it was unable to handle the refineries, according to Obasanjo, who further stated that when he asked foreign oil corporations like Shell to run the facilities, they refused.
Aliko Dangote and other Nigerians had invested $750 million to gain control of the refineries, but his successor Yar'adua annulled the agreement, according to Obasanjo.
What Obasanjo had said
'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 civilized 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.'
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