Interview: Dangote Refinery , Nigeria’s Pool of Vast Maritime Opportunities – Expert
Capt. (Dr) Michael Ogbekile Ogochukwu Ifesemen a master mariner and maritime expert speaks on the enormous potentials of the Dangote Refinery sited in Lagos.
Ifesemen listed, the immediate, medium and long term gains while lauding the over 600 ships received at the facility within its first year of operation as an outstanding feat that will continue
Q:Give us an insight into how Nigeria can maximize the maritime benefit derivable from the Dangote Refinery.
With the refinery, especially the Dangote Refinery ,a lot of ships will be coming into the country. If you consider the number of ships attracted in the first year of it’s operation, over 600 international vessels came in. That alone significantly increases port operations.
By increasing port operations, there will be increased earnings for port operators and other stakeholders. Beyond direct revenue from port facilities, it will also create a lot of marine-related jobs. The more ships that come in, the more manpower is required, both for port operations and marine services.
So, the port operators, terminal operators, and Nigerians working in the sector all benefit. However, there is also a downside. The influx of foreign ships may negatively affect some indigenous vessels, mainly because of international standards. Some indigenous vessels may not meet the required standards for certain jobs.
That said, this challenge is also a booster for Nigerian maritime operators and ship owners. While it may seem negative, it pushes them to upgrade and acquire vessels that meet global standards. In that sense, it becomes an opportunity for growth.
It doesn’t end with international shipping alone. There will also be West African coastal shipments, which will further involve Nigerian ship owners and enable them to participate actively in regional trade.
The more Nigerian ship owners are involved, the less reliance there is on foreign vessels, which improves the Cabotage regime. Cabotage is meant to protect local shipping by limiting foreign participation in domestic waters.
Another important aspect is transportation. Dangote products can be moved either by trucking or by sea. Sea transportation reduces pressure on roads and lowers government spending on road repairs caused by heavy-duty trucks.
Most transshipment along the West African coast is done by sea. This will require the use of barges, many of which are locally built in Nigeria. This creates more jobs for barge builders and operators. All these are maritime activities, and they show that the refinery has a strong positive impact on Nigeria’s maritime sector.
Q:Let’s now look at the immediate, medium-term, and long-term gains of having such a gigantic facility. What are the low-hanging fruits in the first three years, and what can Nigeria gain in the next 10 years and beyond?
Most of these benefits were captured earlier, but let me categorize them. First, the number of ships that came in during the initial phase of operation has already generated significant revenue for port facilities. This is an immediate benefit, and it will continue.
It has also created immediate employment, and these jobs will be sustained. At the moment, international vessels dominate, so Nigerian participation is still limited.
However, in the medium term, distribution to West Africa will increase Nigerian involvement.
Overall, the refinery is creating jobs, boosting the economy, and increasing traffic to ports that previously had less activity. The impact goes beyond the refinery terminals alone, it will attract other forms of trade, boosting both exports and imports.
Q:Nigeria is a crude oil exporter, yet Dangote Refinery also sources crude from outside the country. Do you see this as sustainable, or would it be better to supply the refinery with locally produced crude?
In my opinion, it would definitely be better to supply the refinery with crude from within Nigeria. However, due to existing arrangements, this is not fully possible at the moment.
That said, if all stakeholders return to the drawing board, Nigeria should aim to supply its own crude locally and export refined products. Exporting refined products earns more revenue than exporting crude oil.
Since we now have the capacity to refine, the earlier we source more crude locally, the better. Over time, the bottlenecks will be addressed, and Dangote Refinery will rely more on local crude.
Q:In summary, are you saying Nigeria benefits more from exporting refined petroleum products, such as PMS, AGO, and DPK than exporting crude oil?
Yes, I believe so. If you look at other countries like the United States, even though they produce crude and gas, they still import and export refined products. Generally, exporting refined products generates more revenue.
Nigeria cannot completely stop exporting crude oil. It depends on production volume. Ideally, Nigeria should produce enough crude to both refine locally and export excess crude. After meeting domestic needs, exporting both crude and refined products allows Nigeria to remain competitive in the global oil market.
One Comment