Politics › Re: Gains We Have Made On Different Fronts, By Buhari In Meeting With British P.M by sulaak(m): 7:25am On Jan 21, 2020 |
Buhari is sitting on NNPC and draining the company like Isabel dos Santos |
Politics › Re: Ezinne Kalu Graduates With First Class In Law From UK University (Photos) by sulaak(m): 3:49pm On Jan 20, 2020 |
Gerrard59: Sure and there is nothing wrong with that. However, what is wrong is when institutions at home rot away and are not up to the standards of schools these politicians send their kids to. Lee Kuan Yew's children schooled abroad; in fact, his son - Lee Hsien Loong (current Singapore's prime minister) - studied in Cambridge - Yew's alma mater. However, universities in Singapore are amongst the best with the National University of Singapore being in the top 20 globally and the Nanyang Technological University being in the top 50. So it is not mutually exclusive to send your kids abroad for studies as a politician and develop your local institutions. Just like Lee Kaun, Awolowo and Zik studied and returned to Nigeria to build world-class universities such as Ife and UNN , their children also studied in local universities, Awo grandson Segun Awolowo studied law at the old Ogun state university. |
Politics › Re: Ezinne Kalu Graduates With First Class In Law From UK University (Photos) by sulaak(m): 3:44pm On Jan 20, 2020 |
Witchersunited: you would do the same thing, so hush it You have the mental state of a failed black man. The old universities were built by Nigerian politician/military in the 60s/70s and they all sent their children to local universities. |
Politics › Re: Pauline Tallen Appoints Daughter, Violet Osunde, As Special Assistant by sulaak(m): 11:35am On Jan 20, 2020 |
dalaman: If she is qualified then there is no problem. . . Being qualified doesn't equate to being the right person for the job, has she gone through a competitive employment process or was she just appointed. |
Politics › Re: EU: Buhari Doing Nothing To End Killings, Persecution Of Christians By Fulani by sulaak(m): 9:12am On Jan 20, 2020 |
Witchersunited: Maybe it's me or somtin
Do people bother to check things
The crisis affects the north more, they kill their own people more than Christians
I'm not a Muslim but Christians over do things
False alarm and panic everywhere, see south west that nothing happens to talking about regional Police, how many people died in South West? Look at the case well and u will see that the vigilante group is a tribal affair, benue that has suffered alot aren't even talking about policing, it's Lagos with only 5 deaths In your opinion, until the killing starts reaching the level of Benue state, that's when the Yoruba's must start protecting themselves. Have you ever heard of the words "proactive measures" |
Politics › Re: Amotekun: Wike, Dickson Quarrel Disturbing Unity Of South South Governors by sulaak(m): 6:54pm On Jan 19, 2020 |
Bolustical: These two governors are one of the most underperforming governors in this present dispensation, considering the disposal of resources.
But their subjects are more interested in Sanwo-Olu, Ganduje, Tinubu and El-Rufai.
They are mortgaging your(Niger-Deltans) futures of the altar of petty politics.
Funny enough, they are from the same party. Remove the oil resources from the South-South and you will have a region more backward than Zamfara without Sharia. The SS has more political and economic leverage over Nigeria, but they waste it on petty squabble and corrupt political leaders. They have the potential to develop their own independent deepsea port, rail network and electricity infrastructures but instead, waste these opportunities on supporting the interest of Abuja as against the interest of their own people. |
Business › Re: Dangote Refinery Gate, Lagos Gradually Taking Shape (Photos) by sulaak(m): 11:24pm On Jan 18, 2020 |
Behind the hype, is Dangote’s refinery a game-changer?In December 2019, an ambitious refinery project in the remote Ibeju-Lekki suburb of Lagos, Nigeria, took delivery of the world’s largest single crude distillation column, to much fanfare.
In December 2019, an ambitious refinery project in the remote Ibeju-Lekki suburb of Lagos, Nigeria, took delivery of the world’s largest single crude distillation column, to much fanfare.
After years of hopes and delays, Aliko Dangote’s 650,000 barrels a day refinery – one of the world’s second biggest – is due to start operations in just over a year’s time.
Government officials and citizens are united in the hope that the Dangote refinery complex, which will also produce fertilizer and petrochemicals will do for Nigeria’s stalled economy something comparable to what signing a 26 year-old Cristiano Ronaldo would do for a premier league team facing relegation.
The Nigerian government’s well-documented import substitution policy direction has Dangote Refinery front and centre of it.
Once onstream in early 2021, the refinery on the coast of Lagos is expected to reverse the decades-old system of exporting crude oil and importing refined petroleum products such as gasoline, diesel and lubricating oil.
Forex savings This should ease pressure on the naira by freeing up some $8.7bn used to import refined petroleum products each year as well as create jobs in services and manufacturing around the project.
The real estate boom around the refinery points to the optimism about the project. It is meant to be a catalyst for local development plans in the Ibeju-Lekki area such as a new international airport, a deep sea port and a free trade zone.
DO THE MATHS Behind the hype, is Dangote’s refinery a game changer? Posted on Friday, 10 January 2020 16:07, updated on Monday, 13 January 2020 10:47
A worker walks past structural parts of an under construction oil refinery plant at Dangote refinery in Ibeju Lekki district, on the outskirts of Lagos, Nigeria August 7, 2019. Picture taken August 7, 2019. REUTERS/Temilade Adelaja In December 2019, an ambitious refinery project in the remote Ibeju-Lekki suburb of Lagos, Nigeria, took delivery of the world’s largest single crude distillation column, to much fanfare.
In December 2019, an ambitious refinery project in the remote Ibeju-Lekki suburb of Lagos, Nigeria, took delivery of the world’s largest single crude distillation column, to much fanfare.
After years of hopes and delays, Aliko Dangote’s 650,000 barrels a day refinery – one of the world’s second biggest – is due to start operations in just over a year’s time.
Government officials and citizens are united in the hope that the Dangote refinery complex, which will also produce fertilizer and petrochemicals will do for Nigeria’s stalled economy something comparable to what signing a 26 year-old Cristiano Ronaldo would do for a premier league team facing relegation.
The Nigerian government’s well-documented import substitution policy direction has Dangote Refinery front and centre of it.
Once onstream in early 2021, the refinery on the coast of Lagos is expected to reverse the decades-old system of exporting crude oil and importing refined petroleum products such as gasoline, diesel and lubricating oil.
Forex savings This should ease pressure on the naira by freeing up some $8.7bn used to import refined petroleum products each year as well as create jobs in services and manufacturing around the project.
The real estate boom around the refinery points to the optimism about the project. It is meant to be a catalyst for local development plans in the Ibeju-Lekki area such as a new international airport, a deep sea port and a free trade zone.
Daily newsletter: join our 100 000 subscribers! Each day, get the essential: 5 things you need to know Email Address Also receive offers from The Africa Report Also receive offers from The Africa Report's partners Despite the positive sentiment towards the refinery however, few people have tried to calculate the measurable impact of the refinery on Nigeria’s economy and the Ibeju-Lekki area in particular.
How far will the refinery cut Nigeria’s fuel import bill and boost exports? Beyond the cash, what will be the effects of siting the new nexus of Nigeria’s downstream petroleum industry in a fast-growing and densely populated area of the country’s commercial capital?
READ: Andrew Alli of SouthBridge believes the savings in foreign exchange from importing oil products would be more limited than many expect.
Is the refinery a cure-all? To understand why Dangote’s Refinery may not deliver the hoped for structural changes, we must first run through the basic figures that tell the story of Nigeria’s trade balance and its internal petroleum consumption:
According to the Nigerian National Petroleum Corporation (NNPC), the country’s daily petrol consumption comes to 51 million litres. Using the standard measure of 47% petroleum motor spirit (PMS) per 159-litre barrel of crude oil according to the U.S. Department of Energy, This means that Dangote’s Refinery must process about 471,500bpd to satisfy Nigeria’s internal demand. What happens to export earnings?
The problem is that if the feedstock for Dangote’s refinery comes from local oil production, as the chief of the state oil company has promised, then it will eat into Nigeria’s export cargoes and revenues.
Nigeria’s 2019 crude oil production averaged 2,037 million barrels a day (b/d)
The 2019 average international crude oil price was $64 per barrel.
If the refinery satisfies Nigeria’s internal demand, it would save over $8.7bn. That’s how much the country spent on fuel imports in 2017. That sounds great, but what about the opportunity cost?
By allocating over 470,000 b/d of locally-produced crude oil to the refinery, the state oil company is losing about $11bn of forex earnings a year. That’s almost a quarter of the country’s current forex earnings. Nigeria would be losing $11bn to save $8.7bn.
That’s not the end of the story
If local refining output meets all local demand, Nigeria will no longer need it’s often opaque and costly fuel subsidies.
Ending that system would mean that the estimated $3.85bn paid to subsidise fuel in 2019 would be saved.
Adding the import savings and the subsidy savings would mean total savings of $12.55bn – slightly over the estimated $11bn of lost forex earnings.
Two difficult roads to a refinery revolution There are still policy options which could mean the Dangote refinery would radically change the state’s finances.
The Dangote Refinery could pay for its 650,000 b/d feedstock from Nigeria at the international market price and in foreign exchange.
That would mean it would be paying over $15bn a year in raw material costs alone.
That exceeds the stated construction costs of the refinery and is more than the net worth of Dangote, still the richest man in Africa.
The other option is more radical still and would require a determined policy shift in government.
Nigeria could boost its crude oil production by 650,000 b/d, supplying all the increase to the Dangote refinery. Then it could export all 2.03mn b/d of crude to its foreign customers and retain the forex without having to budget for fuel imports. This would be within the OPEC rules – the cartel’s limits on production do not include crude allocated to local refining nor do they govern exports of refined products.
This would allow Nigeria to use all its OPEC quota for exports and at the same time meet all its local needs for petroleum products, then would be able to export over 100,000 b/d of refined products for forex to the region and beyond.
That would be a game-changer. And would be in a different league from the estimated savings of $1.5bn a year under the current financial structure.
The tough question is whether Nigeria could possibly ramp up local crude production by 650,0000 over the next five years.
No question that it would be technically possible. The NPPC insist its medium-term target is 3mn b/d production.
But while Nigeria has the reserves to sustain 4mn b/d but it hasn’t made the necessary investments. Lining up the deals and the new partners – whether China, India or western IOCs such as Shell or Exxon – could take five years alone.
It is also highly significant that there has been no public discussion of a credible way for Nigeria to boost local production to maximise the benefits of the refinery project.
How will Dangote make money from the refinery? In the absence of any discussion about coordinating strategy, we are thrown back on the tricky but vital question for Dangote – how can the refinery make a profit?
It may be that the refinery could end up being subsidised by the government – an accusation that has trailed Dangote’s rise to business supremacy.
For example, if the refinery is guaranteed 650,000 barrels per day at a fixed and favourable (naira) price, there is nothing stopping it from satisfying the local consumption quota, then selling the extra circa 179,000 bpd worth of product to buyers anywhere in the world – at higher international prices.
In other words, Nigeria could end up exchanging a corrupt and opaque fuel subsidy programme that purports to assist ordinary Nigerians with a hidden corporate subsidy that assists a multibillion-dollar business entity.
And that is just one half of the bigger picture.
Ibeju -Lekki’s Infrastructure Problem – Another Elephant in the Room Speaking at the Offshore Trading Logistics Expo in October 2019, Dangote Group Executive Director, Devakumar Edwin said there was no plan for refined products to be moved to market around the country by rail.
According to him, a transport solution made up of “shuttle boats” and expanded road networks would do the trick.
This implies the existing traffic nightmare and safety hazard – thousands of 40-ton 12-wheeler road tankers loaded with 33,000 litres of petrol – will simply be moved from Apapa Port and Port Harcourt to the Lekki corridor, on the eastern flank of Lagos.
The Lagos State government says it has plans to build a “7th Axial Road” linking Ibeju-Lekki to the Benin-Sagamu Expressway, so as to bypass the residential Lekki-Epe corridor.
The new road could take more than a decade if it ever gets done.
For example, 12 years into what was supposed to be a 4-year project, only 30KM of the 49.4km Lekki-Epe expressway has been completed. As at 2013, 15KM was completed at a total cost of about N50bn ($423m), whereas the entire project was initially projected to cost $460 million (54.2bn), meaning that as much as 70 percent of the initially proposed project sum was spent constructing only 30 percent of the project. Further information on money spent on the road since 2014 is obscure. Lagos State has refused to open its books to scrutiny, even after a 2017 Appeal Court ruling held that all Nigerian states must abide by the provisions of the Freedom of Information Act. Exactly how much it has spent on the still-uncompleted expressway is anyone’s guess.
Knock-on effects Against this background, the idea that the proposed 7th Axial Road intended to rescue Lekki from its impending tanker traffic doom will magically come into into existence between now and the refinery’s January 2021 opening date is fanciful.
Instead it looks likely that the Lekki-Epe expressway will become ground zero for an unwelcome and terrifyingly dangerous new tanker traffic problem, which is currently confined to Lagos Mainland.
One of the very few decent and affordable residential districts in Lagos is about to follow Apapa – a once prosperous middle class Lagos neighbourhood that has deteriorated over the past two decades into a miasma of degraded infrastructure, burnt-out vehicle carcasses and fallen shipping containers.
If the trucks do not have an alternative route, it will spark an inevitable demographic and capital flight Lekki will suffer as thousands of road tankers tear a predictable path of accidental infernos and human misery en route to the Nigerian downstream oil industry’s new Mecca.
David Hundeyin By David Hundeyin Nigerian writer and journalist
https://www.theafricareport.com/21854/behind-the-hype-is-dangotes-refinery-a-game-changer/ |
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Politics › Re: Nigeria Considers $2.8 Billion External Loan For 2020 Budget by sulaak(m): 5:09am On Jan 18, 2020 |
Buhari would have nearly doubled Nigeria debt profile in 8 years, yet Nigeria economic productivity has failed to diversify or improved.
PDP: National Debt Profile 1999 to 2015 $61 billion (16 years )
APC: National Debt Profile 2015 to 2019 $82 billion(4 years)
APC: Estimation based on approval of $29 billion 2019 to 2023 $112 (4 Years). |
Education › Re: Video Of Out Of School Children In Northern Nigeria Stir Panic Online by sulaak(m): 12:28am On Jan 18, 2020 |
brainhgeek: Criminalize almajiri system in the north, you have solved Boko Haram palava by 50% You have to see the out of school kids in ibadan too. Their parents have just one mission, give birth to as many as possible, inaugurate them early into the begging system. Northern illiterate Muslims are a curse on this nation. Awolowo solved the illiteracy problem in Oyo state by introducing free universal education and enforcing it. This was backed by primary health care to support mother and families by introducing primary health care. Northern Nigerian are still living in the 7th century with a caste system of Fulani ruling class and Hausa slave caste. |
Education › Re: Video Of Out Of School Children In Northern Nigeria Stir Panic Online by sulaak(m): 12:00am On Jan 18, 2020 |
Ekemeze: "Nigeria is not poor", Northern Nigeria ALONE is poor Take Northern Nigeria out of Nigeria. You will have a country that will have a GDP of $350 billion, the growth rate in the double digits, the population of 100 million population growth of less than 1.5% and the literacy rate of 85%. |
Politics › Re: Miyetti Allah: Amotekun May Deprive Southwest Of 2023 Presidency by sulaak(m): 4:41pm On Jan 16, 2020 |
Is the presidency a carrot that can be dangled before Nigerian?
I thought Nigeria practice democracy. The South-West must choose security over presidency their first duty is to protect their people. |
Politics › Re: Jime: Akume Meets Father Mbaka Ahead Of Supreme Court judgement (Photos) by sulaak(m): 10:18pm On Jan 15, 2020 |
What kind of democracy is Nigeria practising, if the court and not the ballot is now the decider? Since the court is now controlled by the sitting government can their judgement be considered to be impartial? |
Politics › Re: Ajaokuta Steel To Gulp $1.5 Billion, Gets 2022 Completion Date by sulaak(m): 8:32pm On Jan 15, 2020 |
FemiMaduka: In Ajaokuta, literally or metaphorically, lies our industrial and technological breakthrough. Metallurgy is a strategic sector in every developed economy.
In the early eras, if a nation conquered another nation and wanted to make sure that the conquered nation remains subjugated under its vassalage, IT IMMEDIATELY BANISHES THE PROFESSION OF BLACKSMITHING. It hasn't changed much even in this 21st century.
Ajaokuta remains the biggest industrial complex in the whole of the subregion (W.A.); its misery is indeed our misery. If we were a people 'blessed' with strategy, we wouldn't eat our next bread till that plant (or another of its kind) starts running.
We are heating up the wrong 'furnace'—the oven. dalass: The Western world knows this, so I'm not pessimistic here, but kolework! Why? Until we can fix such things ourselves, no hope! These monies just go down the drains.... Too bad our engineers are not trained well enough to fix our ailing technology.. We always have to go countries that don't speak English. All their manuals etc will be useless once they leave...all will still be moribund... Our refineries are great examples.. Chief, this has nothing to do with the Western world, aren't they partners in the largest industrial complex in West Africa Bonny Island LNG. The West, Chineses and Indian are major partners in the development and funding of the Lekki FTZ , West Africa first deepsea port, modern factories and the largest refinery in Africa. Some of the funding for the $1.5 billion investment will come from Western banks. It's imperative that Nigerian move away from the victim culture and focus on the real reason why Ajaokuta is not a viable proposition, which is the lack of management capabilities and good governance, without these two important attributes, Ajaokuta will be another Aluminium Smelter Company of Nigeria (ALSCON), which despite $3.5 billion investment and the latest in Aluminium technology from USA, had to be sold to the Russian for less than $200 million. Till this day Nigeria has yet to produce a single ingot from the ALSCON plant. |
Politics › Re: Ajaokuta Steel To Gulp $1.5 Billion, Gets 2022 Completion Date by sulaak(m): 10:06am On Jan 15, 2020*. Modified: 1:50am On Jan 16, 2020 |
omohayek: That is actually the biggest paradox about the excitement over this announcement, bigger even than the failure to understand how much has already been wasted on Ajaokuta over the decades. Why on earth would any sane Nigerian expect a government which can't even maintain basic roads - to the extent that a private actor like Dangote is now doing the FG's job for it in Apapa - to be able to manage a steel plant, even the most efficient and modern one? Don't we all know by now what happens when Nigerians get their hands on a parastatal, how they staff it with incompetent "federal character" appointees who in turn pull in their relatives and cronies to sleep on the job when they aren't asking for bribes, embezzling funds and selling off equipment? It's as if Nigerians think Ajaokuta would be staffed with a special new breed of Nigerian civil servant entirely, rather than the same lazy, crooked, tribalistic, incompetent deadweights they see in every government office across the land. Bro, some Nigeria are dreamers |
Politics › Re: Ajaokuta Steel To Gulp $1.5 Billion, Gets 2022 Completion Date by sulaak(m): 10:02am On Jan 15, 2020 |
The biggest con in Nigeria.
A country that can't manage modern oil refineries will now waste a further $1.5 billion on an antiquated steel plant. Why not hand the plant over to the Russian and let them invest their own funds to complete this historical relic. |
Business › Re: Aliko Dangote Vows To Takeover Arsenal In 2021 by sulaak(m): 8:21am On Jan 14, 2020 |
9jaRealist: QUIT LYING! 
Dangote Cement is a publicly-listed company and therefore publishes each of its AUDITED quarterly, half-year and annual reports as per regulatory requirements (both the SEC and stock exchange rules and regulations) for the benefit of shareholders and the investing public. In the last available quarterly results for the year ending Q3 2019 (full-year results usually are published within 90 days following the end of year), volumes, revenue and PROFITS (not loss) of the company's Pan-African operations all INCREASED from the previous results. SMH at your Beer-Parlor reports. > His African Cement operations are all loss-making, it's only in Nigeria that his business is doing very well and offsetting the loss. |
Health › Re: Nigerians Use Paracetamol To Cook Meat: Concern As More People Use It by sulaak(m): 8:14am On Jan 14, 2020 |
This is what happens to a society that lacks the ability to develop their productive capabilities. The stupid Nigerians have sold all their trees to Chinese or firewood merchant to the point that the that they have no cooking material. The future of this country is bleak. to save cost as the prices of firewood, kerosene and cooking gas hit the rooftop |
Business › Behind The Hype, Is Dangote’s Refinery A Game Changer? by sulaak(op): 4:36am On Jan 14, 2020 |
Behind the hype, is Dangote’s refinery a game changer?In December 2019, an ambitious refinery project in the remote Ibeju-Lekki suburb of Lagos, Nigeria, took delivery of the world’s largest single crude distillation column, to much fanfare.
In December 2019, an ambitious refinery project in the remote Ibeju-Lekki suburb of Lagos, Nigeria, took delivery of the world’s largest single crude distillation column, to much fanfare.
After years of hopes and delays, Aliko Dangote’s 650,000 barrels a day refinery – one of the world’s second biggest – is due to start operations in just over a year’s time.
Government officials and citizens are united in the hope that the Dangote refinery complex, which will also produce fertilizer and petrochemicals will do for Nigeria’s stalled economy something comparable to what signing a 26 year-old Cristiano Ronaldo would do for a premier league team facing relegation.
The Nigerian government’s well-documented import substitution policy direction has Dangote Refinery front and centre of it.
Once onstream in early 2021, the refinery on the coast of Lagos is expected to reverse the decades-old system of exporting crude oil and importing refined petroleum products such as gasoline, diesel and lubricating oil.
Forex savings This should ease pressure on the naira by freeing up some $8.7bn used to import refined petroleum products each year as well as create jobs in services and manufacturing around the project.
The real estate boom around the refinery points to the optimism about the project. It is meant to be a catalyst for local development plans in the Ibeju-Lekki area such as a new international airport, a deep sea port and a free trade zone.
DO THE MATHS Behind the hype, is Dangote’s refinery a game changer? Posted on Friday, 10 January 2020 16:07, updated on Monday, 13 January 2020 10:47
A worker walks past structural parts of an under construction oil refinery plant at Dangote refinery in Ibeju Lekki district, on the outskirts of Lagos, Nigeria August 7, 2019. Picture taken August 7, 2019. REUTERS/Temilade Adelaja In December 2019, an ambitious refinery project in the remote Ibeju-Lekki suburb of Lagos, Nigeria, took delivery of the world’s largest single crude distillation column, to much fanfare.
In December 2019, an ambitious refinery project in the remote Ibeju-Lekki suburb of Lagos, Nigeria, took delivery of the world’s largest single crude distillation column, to much fanfare.
After years of hopes and delays, Aliko Dangote’s 650,000 barrels a day refinery – one of the world’s second biggest – is due to start operations in just over a year’s time.
Government officials and citizens are united in the hope that the Dangote refinery complex, which will also produce fertilizer and petrochemicals will do for Nigeria’s stalled economy something comparable to what signing a 26 year-old Cristiano Ronaldo would do for a premier league team facing relegation.
The Nigerian government’s well-documented import substitution policy direction has Dangote Refinery front and centre of it.
Once onstream in early 2021, the refinery on the coast of Lagos is expected to reverse the decades-old system of exporting crude oil and importing refined petroleum products such as gasoline, diesel and lubricating oil.
Forex savings This should ease pressure on the naira by freeing up some $8.7bn used to import refined petroleum products each year as well as create jobs in services and manufacturing around the project.
The real estate boom around the refinery points to the optimism about the project. It is meant to be a catalyst for local development plans in the Ibeju-Lekki area such as a new international airport, a deep sea port and a free trade zone.
Daily newsletter: join our 100 000 subscribers! Each day, get the essential: 5 things you need to know Email Address Also receive offers from The Africa Report Also receive offers from The Africa Report's partners Despite the positive sentiment towards the refinery however, few people have tried to calculate the measurable impact of the refinery on Nigeria’s economy and the Ibeju-Lekki area in particular.
How far will the refinery cut Nigeria’s fuel import bill and boost exports? Beyond the cash, what will be the effects of siting the new nexus of Nigeria’s downstream petroleum industry in a fast-growing and densely populated area of the country’s commercial capital?
READ: Andrew Alli of SouthBridge believes the savings in foreign exchange from importing oil products would be more limited than many expect.
Is the refinery a cure-all? To understand why Dangote’s Refinery may not deliver the hoped for structural changes, we must first run through the basic figures that tell the story of Nigeria’s trade balance and its internal petroleum consumption:
According to the Nigerian National Petroleum Corporation (NNPC), the country’s daily petrol consumption comes to 51 million litres. Using the standard measure of 47% petroleum motor spirit (PMS) per 159-litre barrel of crude oil according to the U.S. Department of Energy, This means that Dangote’s Refinery must process about 471,500bpd to satisfy Nigeria’s internal demand. What happens to export earnings?
The problem is that if the feedstock for Dangote’s refinery comes from local oil production, as the chief of the state oil company has promised, then it will eat into Nigeria’s export cargoes and revenues.
Nigeria’s 2019 crude oil production averaged 2,037 million barrels a day (b/d)
The 2019 average international crude oil price was $64 per barrel.
If the refinery satisfies Nigeria’s internal demand, it would save over $8.7bn. That’s how much the country spent on fuel imports in 2017. That sounds great, but what about the opportunity cost?
By allocating over 470,000 b/d of locally-produced crude oil to the refinery, the state oil company is losing about $11bn of forex earnings a year. That’s almost a quarter of the country’s current forex earnings. Nigeria would be losing $11bn to save $8.7bn.
That’s not the end of the story
If local refining output meets all local demand, Nigeria will no longer need it’s often opaque and costly fuel subsidies.
Ending that system would mean that the estimated $3.85bn paid to subsidise fuel in 2019 would be saved.
Adding the import savings and the subsidy savings would mean total savings of $12.55bn – slightly over the estimated $11bn of lost forex earnings.
Two difficult roads to a refinery revolution There are still policy options which could mean the Dangote refinery would radically change the state’s finances.
The Dangote Refinery could pay for its 650,000 b/d feedstock from Nigeria at the international market price and in foreign exchange.
That would mean it would be paying over $15bn a year in raw material costs alone.
That exceeds the stated construction costs of the refinery and is more than the net worth of Dangote, still the richest man in Africa.
The other option is more radical still and would require a determined policy shift in government.
Nigeria could boost its crude oil production by 650,000 b/d, supplying all the increase to the Dangote refinery. Then it could export all 2.03mn b/d of crude to its foreign customers and retain the forex without having to budget for fuel imports. This would be within the OPEC rules – the cartel’s limits on production do not include crude allocated to local refining nor do they govern exports of refined products.
This would allow Nigeria to use all its OPEC quota for exports and at the same time meet all its local needs for petroleum products, then would be able to export over 100,000 b/d of refined products for forex to the region and beyond.
That would be a game-changer. And would be in a different league from the estimated savings of $1.5bn a year under the current financial structure.
The tough question is whether Nigeria could possibly ramp up local crude production by 650,0000 over the next five years.
No question that it would be technically possible. The NPPC insist its medium-term target is 3mn b/d production.
But while Nigeria has the reserves to sustain 4mn b/d but it hasn’t made the necessary investments. Lining up the deals and the new partners – whether China, India or western IOCs such as Shell or Exxon – could take five years alone.
It is also highly significant that there has been no public discussion of a credible way for Nigeria to boost local production to maximise the benefits of the refinery project.
How will Dangote make money from the refinery? In the absence of any discussion about coordinating strategy, we are thrown back on the tricky but vital question for Dangote – how can the refinery make a profit?
It may be that the refinery could end up being subsidised by the government – an accusation that has trailed Dangote’s rise to business supremacy.
For example, if the refinery is guaranteed 650,000 barrels per day at a fixed and favourable (naira) price, there is nothing stopping it from satisfying the local consumption quota, then selling the extra circa 179,000 bpd worth of product to buyers anywhere in the world – at higher international prices.
In other words, Nigeria could end up exchanging a corrupt and opaque fuel subsidy programme that purports to assist ordinary Nigerians with a hidden corporate subsidy that assists a multibillion-dollar business entity.
And that is just one half of the bigger picture.
Ibeju -Lekki’s Infrastructure Problem – Another Elephant in the Room Speaking at the Offshore Trading Logistics Expo in October 2019, Dangote Group Executive Director, Devakumar Edwin said there was no plan for refined products to be moved to market around the country by rail.
According to him, a transport solution made up of “shuttle boats” and expanded road networks would do the trick.
This implies the existing traffic nightmare and safety hazard – thousands of 40-ton 12-wheeler road tankers loaded with 33,000 litres of petrol – will simply be moved from Apapa Port and Port Harcourt to the Lekki corridor, on the eastern flank of Lagos.
The Lagos State government says it has plans to build a “7th Axial Road” linking Ibeju-Lekki to the Benin-Sagamu Expressway, so as to bypass the residential Lekki-Epe corridor.
The new road could take more than a decade if it ever gets done.
For example, 12 years into what was supposed to be a 4-year project, only 30KM of the 49.4km Lekki-Epe expressway has been completed. As at 2013, 15KM was completed at a total cost of about N50bn ($423m), whereas the entire project was initially projected to cost $460 million (54.2bn), meaning that as much as 70 percent of the initially proposed project sum was spent constructing only 30 percent of the project. Further information on money spent on the road since 2014 is obscure. Lagos State has refused to open its books to scrutiny, even after a 2017 Appeal Court ruling held that all Nigerian states must abide by the provisions of the Freedom of Information Act. Exactly how much it has spent on the still-uncompleted expressway is anyone’s guess.
Knock-on effects Against this background, the idea that the proposed 7th Axial Road intended to rescue Lekki from its impending tanker traffic doom will magically come into into existence between now and the refinery’s January 2021 opening date is fanciful.
Instead it looks likely that the Lekki-Epe expressway will become ground zero for an unwelcome and terrifyingly dangerous new tanker traffic problem, which is currently confined to Lagos Mainland.
One of the very few decent and affordable residential districts in Lagos is about to follow Apapa – a once prosperous middle class Lagos neighbourhood that has deteriorated over the past two decades into a miasma of degraded infrastructure, burnt-out vehicle carcasses and fallen shipping containers.
If the trucks do not have an alternative route, it will spark an inevitable demographic and capital flight Lekki will suffer as thousands of road tankers tear a predictable path of accidental infernos and human misery en route to the Nigerian downstream oil industry’s new Mecca.
David Hundeyin By David Hundeyin Nigerian writer and journalist
https://www.theafricareport.com/21854/behind-the-hype-is-dangotes-refinery-a-game-changer/ |
Career › Re: The Training Or The Job: Which Should I Choose? by sulaak(m): 2:16am On Jan 14, 2020 |
nakaman: Get a job, then go to school, it's ur timing, there are weekend programs n evening programs, no excuse. My advice is to always select work when it's available, especially in a country like Nigeria. The best education is what you get from working, full-time education, in my opinion, is overrated. The best option is to work and study, it will require a lot of hard work, sacrifice and dedication but the results are immense because in today world you can access part-time degrees courses across Nigeria, you can also study for a European or American degree with EDX or Coursera. Employers will prefer a graduate with both work experience and education, this is your chance to have both. Good Luck in your future endeavour. BTW skills in shoemaking is a brilliant opportunity if you can raise the necessary funds to build your own business. NB: Any work experience is better than none. |
Politics › Re: Ben Kalu Visits Bola Tinubu (Photos) by sulaak(m): 1:33am On Jan 14, 2020 |
Nasir123: Tinubu has tried his best. After all he's better than the rest politicians. My point is, why can't others do the undone?
Tinubu is a smart politician. You just have to give him that. Why do we always have low standard in Nigeria? What do you mean Tinubu tried. He was elected to succeed and do his job to the best of his abilities. Why compare him to other Nigerian politicians. Lagos is Nigeria and West Africa only megacity, we should be comparing Tinubu performance to with state governors and mayors of megacity in India, China and Brazil and there you will see that Tinubu is a complete and hopeless failure, but then this is Nigeria where standard and accomplishment are not required. |
Business › Re: Aliko Dangote Vows To Takeover Arsenal In 2021 by sulaak(m): 11:45pm On Jan 13, 2020 |
thesicilian: The federal government of Nigeria won't be there in England to make favorable policies for the club's monopoly. RIP in advance to Arsenal FC. They will start causing Nigerian when he start messing Arsenal around. Dangote cement plants are all operating at a loss ($200 million combined) in 14 African countries except in Nigeria where his cement businesses are operating at a profit. |
Politics › Re: MURIC: Hanan Buhari Flying On Presidential Jet Is An Inspiration To The Youth by sulaak(m): 11:36pm On Jan 13, 2020 |
Cantonese: And yet he is tackling corruption? Remember "I am called baba go slow". Remember "I am for everyone and I am for no one".
There is God sha. God will not be solving this problem, this is on Nigerian to wake up and take it back. "There was a country" now has meaning |
Politics › Re: MURIC: Hanan Buhari Flying On Presidential Jet Is An Inspiration To The Youth by sulaak(m): 10:54pm On Jan 13, 2020 |
yarimo: As long as the good people of Nigeria are concerned, MURIC is the best thing to happen for Nigeria. FG should honour AKINTOLA with GCON it's clear he means well for Nigeria. MURIC and Akintola are the reason why the South West is regressing in education and social development. There was a time when the south-west produce intelligent and socially aware politician and intellectual like Awo, Ajasin, Falae and Jakande. Now, all they have are political prostitute that will prostrate for the highest bidder. |
Politics › Re: Hanan Buhari: I Can’t Wait For Next Project by sulaak(m): 7:51pm On Jan 13, 2020 |
4four: you mean you are comparing President of country with MD or CEO of company? Mhen! Then it high time to give up on Nigeria teens (cos I known you are still in ur teen) did you known what tax payer money is? Probably you are not paying tax, when you start to pay tax then come back here to start make contributions The next generation of Nigerian will be worst than APC/PDP corruption politician, majority of them have been bought up in a culture of selfishness, corruption, morally decadent and low values |
Politics › Re: Hanan Buhari: I Can’t Wait For Next Project by sulaak(m): 7:31pm On Jan 13, 2020 |
Adeboi14: God bless you. Nigerians with hypocrisy, 99% of people complaining will do more than that if they find themselves in that shoe 99.9999% of Nigerian, will never be in her shoe or leaders that will be required to demonstrate a higher level of leadership and integrity. There is a reason why Nigeria has never produce a leader of the calibre of Mandela, Nkrumah or Nyerere because on average Nigerian have a very low expectation of their leaders. |
Politics › Re: Hanan Buhari: I Can’t Wait For Next Project by sulaak(m): 7:27pm On Jan 13, 2020 |
adeniyi3971: Really, I don't see any problem in her using the Presidential Jet. After all she's in the first family. Educate me, but to be sincere, I don't think the presidential jet is limited to the president alone, least his family should be entitled too.
PS - I'm not a fan of the president, but I just don't see why people are angry about this. Many people here given the opportunity will do the same. If you don't see a problem with a postgraduate student using a presidential that will cost between $5000 - $10,000 per hour to operate then you should not complain about corruption. What has happened to Nigerian |
Politics › Re: Buhari Signs 2019 Finance Bill Into Law, VAT Now 7.5% by sulaak(m): 3:24pm On Jan 13, 2020 |
VAT should be 20% |
Politics › Re: Babatunde Gbadamosi: Let Us Break Nigeria If North Retains Power In 2023 by sulaak(m): 12:23pm On Jan 13, 2020 |
akdjr: This is a delusional statement I have ever seen. Power is never given it is taken. How can you sit back at the comfort of your home and tell a legitimate Nigerian not to contest for an elective post he or she is qualified for just because your want that post to come from a particular part of the country which is unconstitutional in all terms. I am totally disappointed seeing such statement coming out from someone who contested for Governorship position in one of the most populated state in Africa. Imagine if Agege people come out to say Lagos should be split if Governor did not come from their side. Instead of you to play the politics which is a game of number to get to the post, you want people with the block vote to just freely hand over power to you. Who does that? Power is never given it is taken or lost The North where wise to the fact that if a Yoruba wasn't made president in 1999 the country will break up, right now Nigeria is at a crossroad and supporting an Igbo candidate looks like the best decision to keep the country together for another four years. On developing Nigeria, that seems to be a decision beyond Nigerian abilities |
Politics › Re: Ben Kalu Visits Bola Tinubu (Photos) by sulaak(m): 5:08am On Jan 13, 2020 |
Nasir123: He can't be the "best definition of Greed" if he still carries everyone along.
I agree he has greed, but not in its best definition.
Tinubu is Nigeria smartest politician. Tinubu is Nigeria most dangerous politician, the consequence for state capture is anarchy and economic collapse. |
Politics › Re: Ben Kalu Visits Bola Tinubu (Photos) by sulaak(m): 5:06am On Jan 13, 2020 |
itsme01: ask the people using the cheap BRT he created if they were carried along or not Why I'm not surprised, that you will identify BRT as a Lagos success story. A company managed by Tinubu nephew Fola Tinubu with the sole monopoly on Lagos roads. I wouldn't be disappointed to know that Tinubu is one of the owners of Primero Transport Company. Why not ask the millions Lagosian driving on the shock potholes that patch every two years only to fall to bits after the slightest drizzle. The millions of Lagosian that were disenfranchised by Tinubu thugs in the recent election. The million of Lagosian that are forced to go to schools without roofs, desks or books. |
Politics › Re: Nigerians To Get 18-Hour Electricity Supply Soon – Sale Mamman, Power Minister by sulaak(m): 7:09pm On Jan 12, 2020 |
200 million people need more than 11,000MW However, he explained that sufficient electricity for everyone could be elusive until the nation hits 11,000MW power distribution |