Despite having no crude oil refining capacity currently, Nigeria is actually on track to becoming Africa’s biggest crude oil refining hub in the next two years, the latest research on African refineries, along with the continent’s outlook for 2023, stated.
Hawilti, a pan-African investment research agency and advisor to businesses, investors, public and private institutions, as well as governments in Africa, released a report on the research on Monday.
“Both the opening of the Dangote Refinery and the rehabilitation of state-owned refineries have the potential to make Nigeria Africa’s biggest refining hub by 2025,” the report, which was obtained by our correspondent in Abuja, stated.
It said there was a positive outlook in West Africa and that the region was notably on the verge of change as new capacity was expected to come on stream in 2023.
The report stated that the region already housed the largest refining capacity in sub-Saharan Africa, although only 23 per cent of it was currently operational.
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“The long-awaited Dangote Refinery, a 650,000 barrels per day single-train crude refining facility that has been a decade in the making, is finally expected to start production this year. Its commissioning is already sending hopes that it could finally start rebalancing Nigeria’s trade deficit.
“With all state-run refineries undergoing rehabilitation, Nigeria imports all its petroleum products, and heavily subsidises gasoline (petrol). It needs the Dangote Refinery to decrease imports, generate currency savings, fight inflation, and ultimately improve its macroeconomic outlook,” it stated.
It noted that Africa’s biggest oil producer had embarked on the rehabilitation of its three state-owned refineries in Port Harcourt, Warri, and Kaduna – totaling some 445,000bpd of refining capacity.
“Tecnimont continues to make progress on bringing Port Harcourt’s complex back to 90 per cent of its capacity while Daewoo E&C was selected in 2022 to execute two ‘quick fix’ projects at both Warri and Kaduna,” Hawilti explained.
It, however, noted that the market was also driven by private oil producers and asset developers who were building modular refineries next to oilfields in the Niger Delta.