Aliko Dangote Refinery: Power pass Power

By Taiwo Olanegan.

When the news broke that Dangote refinery would be sited in Ondo coastal region, I got so excited and happy about the news l raised it up at a thanksgiving and prayer time in our local church then. Not kidding. If you have been to, worked, or lived in a petroleum refinery complex, you would appreciate what a great blessing the gigantic business could be. Warri and PH refinery complexes in their prime added 3x whatever advantage the exploration and production companies did to the two respective oil cities. A refinery is more than a factory. It is a humongous city of steel. Like Ekpan Warri, and like Eleme Port Harcourt.

Then l heard another shocker. Dangote refinery capacity is 650,000 barrels of oil per day. I disbelieved the figure outrightly. 650,000! For goodness sake, where would the billionaire get the feedstock (crude oil) volume? How possible? Is he going to lay pipes from Escravos to Lagos? At that time, our production figure was 1.8m bpd. I asked further: Would the lOC agree to sell 30% of production volume to Dangote? Where will he get the forex to buy such? And which market would receive his refined products knowing that FG was frenetic about making Warri and Port Harcourt refineries work? These things bothered me all the time. Now the chickens are here roosting.

The oil industry is a global cartel. If you are an industry watcher, you would concur. Nigeria’s age-long economic and security challenges are not far from the yo-yo and high level manipulations in the global oil industry. These intrigues are intentional, international, and sometimes wicked in every sense of the word. That’s why since 1999, almost all our presidents added the ministerial supervision of NNPC to their job. I support it 100%. Because, if you remove the oil ministry out of the Nigerian presidency, all that would be left would be ministry of waste management.

Oil politics is ballistic. I pity Aliko Dangote, he forgot that his buddy, good man, Goodluck Jonathan isn’t president any longer. A billionaire could sometimes be a simpleton. These guys presently on the saddle are sharks and businesmen like him. He can’t roughshod them. When I gave an opinion (here) that the recent cement scarcity and price hike was some war ongoing between Tinubu’s Kitchen and Dangote Group, folks shouted me down. I shrugged and walked away. Cement price is still high inspite of pleadings and threats by the newly sworn government then. It was a battle Dangote won. Aso Rock said, okay! Let’s see.

But this new war, Aliko is not going to win it. His balls are in the hands of powers and international oil players bigger and experienced than him. His Refinery is 650,000 capacity, yet, he doesn’t own nor control any major producing oil field. He thought the goodie political air of GEJ, is friend, and the romantic season of Buhari, his kinsman, would last forever. What a mistake! Now he cannot suddenly or angrily convert the refinery complex to process palm kernels. His fate and future compulsorily lie with NNPCL – acting for, and with other principalities.

Although conservative Aliko is breaking protocol speaking to Reuters, Financial Times about his troubles, these cabal guys don’t read social media rantings. They know what you and I don’t know. And even if we know them, we won’t write them here. I don’t want to be jailed.

Aliko Dangote’s trade history and file and his use of forex allocated by Godwin Emefiele is with government. This is a presidency headed by a man who knows some accounting. The figures are suspicious. Dangote would have been arraigned with Emefiele after Efcc made the attempts, but the optics would be terrible for him and the government. So government chose to put a pedal on it, for sake of the peace. However, 650,000 bpd refinery is too large a plate meant for a person. How can only one fellow own a refinery that could cover the petrol needs of West Africa? What happens when he goes into steel and oil exploration?

In the September, 2013 edition of Harvard Business Review, the journal warned about the consequences of allowing Dangote keep the major stake in the proposed refinery, it advised: “it can be argued that Dangote’s move is risky for Nigeria because his success would concentrate too much power in one man’s hand. This is a valid concern…” I kept that edition of HBR as souvenir, and have referenced and reread it each time an iron sponge is used on Aliko. I didn’t know the word would come true this quickly.

Dangote is in a net. ‘They’ won’t let him and investor-friends go. Antitrust law, propaganda, and outright denial of feedstock and certifications would force Aliko to the negotiating table. He has conceeded he won’t do steel. That oblation is not enough. Aliko Dangote is smart. He knows what is required. He would do better by allowing a goal or two more scored against him. Because this ball, is not in his court. If it is, it’s a penalty award against him.

Government is not threatened by Aliko’s bluffs.. Dangote Refinery can’t hold Nigerian petrol consumers to ransom. Warri and Port Harcourt refinery would deliver enough products to the local market. And if it’s not enough, NNPCL would import. That’s what that regulator man that came on TV was sent to tell Aliko. Again, the ball – for the first time in many years and administrations – is not in the court of our much loved Aliko Dangote.