According to OPEC, West African countries’ importation of oil will decline when the Dangote Refinery begins operation in Lagos, Nigeria. The facility is expected to refine as much as 650,000 barrels of crude oil per day.
OPEC stated that new projects will enhance production level in Africa, and Dangote Refineryis a great booster for the oil and gas sector in Nigeria. The project will also positively impact on other African countries’ economies.
A statement from Dangote Group quoted OPEC as saying the following:
“LAST YEAR’S WORLD OIL OUTLOOK HINTED THAT IN AFRICA, ‘NEW PROJECTS COULD IMPROVE THE SITUATION SOMEWHAT TOWARD THE END OF THE PERIOD.’ THIS YEAR, INCREASING CONFIDENCE THAT THE DANGOTE PROJECT IN NIGERIA WILL GO AHEAD IS INDEED CHANGING THE PICTURE.
“ALLOWING FOR SOME UNCERTAINTY IN THE PROJECT’S START-UP TIMETABLE, INCREMENTAL POTENTIAL IN AFRICA IS EXPECTED TO CONTINUE TO LAG INCREMENTAL DEMAND-BASED REQUIREMENTS THROUGH 2020, AFTER WHICH THE POTENTIAL IS FOR A BALANCE OR EXCESS REQUIREMENTS.
“A DEFICIT OF AROUND 0.2 MILLION BARRELS PER DAY IN 2019 TO 2020 IS ESTIMATED TO SWING TO AN EXCESS OF AROUND 0.3 MILLION BPD BY 2022 TO 2023. IT MUST BE BORNE IN MIND THAT THIS REGIONAL OUTLOOK IS UNUSUAL IN THAT IT HINGES LARGELY ON A SINGLE PROJECT.”
Dangote Refinery is one of many
OPEC disclosed that currently, there are 50 refinery projects in Africa. If all are eventually built, these refineries will add nearly five million barrels per day of new refining capacity to the continent.
“THIS YEAR, THE OUTLOOK REPRESENTS A SIGNIFICANT REVERSAL FROM RECENT HISTORY. FOR THE FIRST TIME IN MANY YEARS, PROJECTED FIRM ADDITIONS AT 1.1 MILLION BPD EXCEED REGIONAL DEMAND GROWTH FOR 2018 TO 2023 AT 0.7 MILLION BPD.
“THIS CHANGE RELATES PRIMARILY TO ONE PROJECT IN NIGERIA NOW UNDER CONSTRUCTION. RECOGNISING THAT THIS ONE MAJOR PROJECT IS IN WEST AFRICA, THE PROSPECTS FOR NORTH AND EAST/SOUTH AFRICA CONTINUE TO BE FOR FURTHER INCREASES IN REGIONAL NET PRODUCT IMPORTS.
“SINCE THE PROJECT IS IN WEST AFRICA, ITS IMPLEMENTATION DOES NOT NECESSARILY ALTER THE SITUATIONS IN NORTH AND EAST/SOUTH AFRICA. WHAT SHOULD HAPPEN, ESPECIALLY IN WEST AFRICA, IS A REDUCTION IN THE NEED AND OPPORTUNITY FOR PRODUCT IMPORTS.”
The Group Executive Director, Strategy, Portfolio Development and Capital Projects, Dangote Industries Limited, Devakumar Edwin, buttressed OPEC‘s estimation, adding that Dangote Group’s ongoing refining and petrochemicals project can meet 100 percent of the domestic demand for petroleum products. This will leave the surplus for export in line with OPEC’s expectation.
The Dangote Refinery will bring a major change in Nigeria, transforming the country into an exporter of refined petroleum products, Edwin said.