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OPEC Hinges Attainment of Global 6.9mbpd Refining Capacity Addition on Dangote Refinery

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Aliko Dangote

Dangote’s 650,000 barrels-per-day (bpd) oil refinery project has been identified as one of the oil distillation companies that would boost global refining capacity by 6.9 million barrels per day between 2021 and 2026.

The Organisation of the Petroleum Exporting Countries (OPEC), which made this disclosure in its 2021 World Oil Outlook released recently, said Africa’s medium-term outlook appears more optimistic with 1.2 million barrels-per-day (mb/d) of new capacity expected by 2026; half of which is to be accounted for by the 650,000 bpd Dangote Oil Refinery project in Nigeria, which is likely to come on stream in 2022.

The oil cartel identified these projects, which are located mostly in Nigeria, Angola and Ghana, to include a number of pre-fabricated modular facilities. “Once commissioned, these projects will help to reduce product imports to Nigeria and West Africa and will, in turn, increase the use of local crude. In North Africa, refinery capacity expansions are likely in Algeria and Egypt,” it said.

Similar to previous outlooks, OPEC said refinery additions are concentrated in developing regions, such as the Asia-Pacific, the Middle East and Africa. OPEC added that the total medium-term capacity additions of 6.9 mb/d are composed of projects in different development stages.

“Around 3.5 mb/d of capacity is under construction or close to this stage; hence, these are the projects with the highest certainty to materialize in the medium-term. There are also projects totalling 3.4 mb/d that are mostly in early stages of development, but still advanced enough in terms of financing and engineering to be considered ‘firm’ medium-term additions,” the global organisation stated.

These regions, it noted, account for almost 90% of the additions in the period 2021–2026. “The medium-term outlook contains several large projects, many of which have petrochemical integration as well. These developments are in line with expected oil demand growth,” it added.

Speaking on investments in refinery projects, OPEC puts the total global estimated required investments at $1.5 trillion in the 2021-2045 period. It noted that these include investments of nearly $450 billion in new refinery projects and expansions of existing units located mostly in developing countries, including those in the Middle East, Asia-Pacific, Africa and Latin America.

OPEC stated, “Required investments in the midstream sector are estimated at around $1.1 billion in the same time horizon and are attributed to the expansion of the infrastructure for refining, storage and pipeline systems, predominantly in developing regions, but also in large oil exporting regions (e.g. the US & Canada and the Russia & Caspian). Thus, globally, oil-related investment needs in the long-term are estimated at $11.8 trillion.

“Long-term (2021–2045) capacity additions are expected at 14 mb/d, mostly in developing countries. However, the Reference Case projects a significant slowdown in the rate of additions. Africa and Other Asia-Pacific are the regions where significant incremental capacities are expected, even after 2030.

The report said, “The continent of Africa is home to an abundance of energy resources, including about 10 per cent of the world’s oil reserves; however, it still has difficulty in harnessing these precious resources to meet its energy demand. This, in turn, hinders efforts to provide affordable and reliable energy required for economic growth and development.

“Africa has yet to unlock its huge potential in the energy sector, although its ever-increasing population growth and economic prospects require more energy. This drawback is mostly due to regional uncertainties, as well as government policies and regulatory frameworks guiding the energy sector, and more recently, the efficiencies required to reduce CO2 emissions in exploration and production activities. These challenges have made it increasingly difficult to secure much-needed financing for E&P from foreign investors.”

The report noted that the impacts of the COVID-19 pandemic had also been a major setback, especially for those countries depending heavily on revenue from fossil fuels for their economic growth and development.

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Dangote advocates Unity, Cooperation among Africans to get global recognition

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ACCRA – President of Dangote Group, Aliko Dangote, has charged African leaders and citizens to be united in the promotion of the continent’s intrinsic greatness through improved trade relations amongst African countries.

 

Speaking at the formal launch of the Pan-African Payment & Settlement System (PAPSS), which is a centralised payment and settlement infrastructure platform for intra-African trade and commerce payments, in Accra, Ghana, on Thursday, January 13, 2022, Dangote urged Africans to close ranks, in a bid to propel the continent towards charting her own course and being the master of her destiny, to maintain her rightful position on the globe.

 

Dangote,  who was represented at the occasion by the Group Managing Director of Dangote Industries Limited (DIL), Olakunle Alake, lauded the African Union, under the auspices of the Afreximbank, for the launch of the PAPSS, which he noted was aimed at facilitating payments across the continent.

 

He asserted that improved trade relations would greatly enhance the speed of recovery across Africa, noting that it had the potential to boost the level of economic activities through intra-Africa trade. He also remarked that the advent of PAPSS would greatly address challenges such as: high-cost, lengthy correspondent banking relationships, delays, among many others, and therefore ease transactions among businesses across Africa.

Dangote Refinery Will Boost Growth of Downstream Sector in 2022, CPPE, Others Affirm

He equally expressed optimism that PAPSS would enhance the volume of trade among countries, which were hitherto not recorded or were overlooked because of the informal approach towards these transactions. According to him, these were now captured to reflect the correct or at least close to the appropriate position of trading activities within the continent, while also boosting the level of economic activities across the continent.

 

Dangote noted the enormous potential and benefits of PAPSS, but nevertheless warned that such projects had their teething issues. He therefore urged regulators and participants across the continent to look beyond any such operational challenges and ensure a successful implementation of the PAPSS.

 

In thanking all the member countries and organisations who contributed to the success of PAPSS by playing key roles leading to the launch of the project, he invoked the words of Ghana’s first President and Prime Minister, and renowned promoter of Pan Africanism – Kwame Nkrumah, stressing that “The forces that unite us are intrinsic and greater…”

 

Dangote thus charged African leaders and citizens to continue to promote the continent’s intrinsic greatness through improved trade relations amongst African countries.

 

 

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Dangote Refinery Will Boost Growth of Downstream Sector in 2022, CPPE, Others Affirm

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The Centre for the Promotion of Private Enterprise (CPPE), an economic advocacy group, has identified Dangote Petroleum Refinery as one of the key expected drivers of growth that would impact positively on the downstream sector of the Nigerian economy in 2022.

Likewise, Financial Derivatives Company Limited, a financial institution, in its recent Economic Report for 2022, expressed a firm belief that Dangote Refinery would boost the growth of the downstream sector of the economy and enhance petroleum products distribution across Africa.

The Managing Director/CEO of Financial Derivatives Company, Bismarck Rewane, however, warned that the refinery, when operational, would not be a final solution to Nigeria’s economic crises. “The coming on stream of Dangote Refinery will no doubt enhance product distribution across Africa. Will Dangote refinery solve Nigeria’s problem? The answer is no. But the company is going to make Nigeria an exporter of refined petroleum products,” he added.

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In a Nigeria Economic Outlook for 2022 released by the CPPE, its Chief Executive Officer, Dr Muda Yusuf said activation of the Petroleum Industry Act (PIA) in 2022 is expected to impact positively on the economic outlook.

“We expect to see positive outcomes as investor sentiments in the oil and gas sector improve on account of the reforms anchored on the PIA. This will however depend on the political will deployed to drive the implementation of the provisions of the Act. It is also expected that the coming on stream of the Dangote refinery in 2022 will also impact positively on the downstream sector of the economy”, he added.

He said the average oil price in 2022 is expected to exceed the budgeted benchmark of sixty-two dollars ($62) per barrel, offering some fiscal headroom. This, he noted, would be powered by higher energy demand driven by the recovery of economic activities globally.

“This trajectory is expected to impact on our foreign reserve and strengthen the capacity of the Central Bank of Nigeria (CBN) to support the foreign exchange market”, Yusuf said. He, however, added that if the Dangote refinery comes on stream in 2022, the fiscal pressure on the economy may abate, but not completely eliminated.

According to the economist, because the service sector is less vulnerable to the structural constraints of the economy, especially the real sector of the economy, it will continue to outpace the real sector in 2022.

He said, “The service sector of the Nigerian economy will continue to outpace the real sector in 2022. In the third quarter of 2021, service sector contribution to GDP was 50 per cent and the growth of the sector was 8.41 per cent. The oil sector contribution to GDP was 7.5 per cent while the non-oil sector contribution was 92.5 per cent. While the industrial sector growth contracted by 1.63 per cent, agriculture grew by 1.2 per cent.”

Yusuf said the Gross Domestic Product (GDP) growth would remain fragile at about three per cent, pointing out that the key expected drivers of growth would be sustained recovery of global oil price.

He said, “We expect that the average oil price in 2022 will exceed the budgeted benchmark of $62 per barrel, offering some fiscal headroom. This would be powered by higher energy demand driven by the recovery of economic activities globally.”

The economist noted that despite the downside risks, the economy would continue to present huge opportunities for investors across all sectors. “This is on account of the resourcefulness of the Nigerian people, especially the entrepreneurs. Other inherent strengths of the Nigerian economy include the market size, the population, and the demographic characteristics”, he added.

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Dangote Cement Partners FRSC for accident-free road transportation

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Dangote Cement Plc, Ibese has embarked on road safety awareness campaign as well as provision of road safety kits to motorists and commercial motorcyclists to help ensure accident-free road transportation.

Also, the Company, as part of its efforts at ensuring accident-free trucking disclosed that it has partnered with the Federal Road Safety Corps (FRSC) to help in the recruitment, training and monitoring of its drivers.

Speaking during the awareness campaign, the Dangote Cement, Ibese Pant Director, Mr. Azad Nawabuddin explained that beyond the reduction of road crashes, the company was targeting zero accident, especially during festive periods when the roads are usually congested.

Explaining the theme for the Campaign, “Use Road Like Person Wey Sabi”, the Dangote plant Director noted that the message of being considerate while using the road is directed at its truck drivers, the commercial motorcyclists and drivers of light vehicles operating in and around the Plant, as well as other members of its communities.

He said, “I therefore enjoin all these actors on our roads who are well represented here today to learn and imbibe necessary tips to improve their use of the road in a professional manner and help cascade the safety messages to their colleagues hereafter.

“We, as Government, Corporate Organizations, Communities and Individuals must all join hands and play our part in ensuring safety on our roads because safety is a collective responsibility.

“Earlier today, we had taken the road safety campaign to our neighbouring communities via roadshows coordinated by FRSC and our employee Volunteers in recognition of the communities as our key stakeholders and partners.

“I am glad that the messages were well received, and it is our hope this will drive some attitudinal change in the way we use the road.”

 

In the same vein, the assistant director of transport in charge of safety and operation in Dangote Cement, Mr. Sanusi Iskilu revealed that the company is fixing board cameras on its trucks so as to help in achieving the zero-accident target.

Iskilu explained that Dangote cement also employed the service of external stakeholders who give feedback on the performances of its drivers, noting

 

“We have a lot of initiatives that we have taken on board. In the recent year, you will discover that our accidents have reduced drastically, and we have improved.

“Strategically, we have been able to fix onboard cameras on some of our trucks, so, we are able to see drivers in transit in their cabin and they are cautioned as well.

 

We have external stakeholders that give feedback of our drivers performance in transit for us to immediately act and ensure that they are monitored, and they are strictly brought under control.”

He added that the awareness campaign started with a reduction in road crashes and has now “moved from our campaign of no harm to people to no accident at all. So, if there is no accident, we can’t hurt anybody let alone killing and we want to consider everybody on the road. And this has even given us credibility from the public apart from the regulatory agencies.”

While giving his lecture, FRSC Commander, Caleb Yerima maintained that every road users need to adhere strictly to the rules and regulations guiding it while commending Dangote cement for embarking on the awareness campaign and the training of its truck drivers so as to help in reducing accidents on Nigeria road.

He said, “Dangote has been doing that; that is why they engage their staff in different training to enhance their performance. For spending billions of naira to purchase vehicles, it means that it also needs training them to preserve the vehicles. We cannot just hand over investments to someone that don’t know how to use it. And that is why training and retraining are very important.”

The highlight of the Dangote Plant Road Safety Awareness Campaign program was the presentation of hundreds of C-Caution, 500 reflective jackets and 100 motorcyclist helmets to the participants at the event.

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