The unfolding drama surrounding the crude oil supply to the Dangote Refinery has taken an unexpected turn, as international business ideation specialist Light Shedrack made a series of explosive allegations during an appearance on Arise TV’s The Morning Show.
Shedrack, accused the Dangote Group of embarking on the refinery project without conducting a thorough feasibility study, leading to the current supply crisis. He also claimed that Dangote is now attempting to manipulate government regulations to secure favourable conditions for his business.
Feasibility Study Lapses: A Critical Oversight
In a candid and incisive discussion, Shedrack laid bare what he described as significant oversights in the planning and execution of the Dangote Refinery project. According to him, the refinery, which was hailed as a game-changer for Nigeria’s oil and gas sector, is now grappling with issues that could have been avoided if proper feasibility and viability studies had been conducted from the outset.
“Before you build a refinery of that stature, it is necessary that you secure agreements on your feedstock. You have to have guarantees that your refinery will always be supplied with the crude oil it needs,” Shedrack stated, emphasising that such planning is fundamental for any large-scale industrial project. “Dangote failed to do this, and now he is in a situation where he is relying on ad-hoc arrangements rather than firm agreements with international oil companies (IOCs).”
Shedrack’s assessment suggests that the current crisis at the Dangote Refinery is not merely a logistical hiccup but a symptom of deeper structural flaws in the project’s foundation. He pointed out that the absence of binding agreements for crude supply has left the refinery vulnerable to market fluctuations and geopolitical dynamics that could disrupt its operations.
“From what I found out, Dangote did not have a workable agreement with the government or with the IOCs. There was no formalised, binding agreement. What existed was an arrangement, and there’s a significant difference between an agreement and an arrangement,” Shedrack explained.
He further elaborated on this distinction by comparing it to a casual arrangement between friends, which lacks the legal binding and security of a formal agreement.
The Government’s Role: A History of Support
Shedrack did not stop at critiquing Dangote’s planning but also delved into the role of the Nigerian government in the refinery’s development. He revealed that midway through the construction of the refinery, Dangote encountered financial difficulties that threatened to halt the project. In response, the Nigerian National Petroleum Company Limited (NNPCL) stepped in, providing a $1 billion facility to support the completion of the refinery.
“Midway into building the refinery, he was stuck and needed funds. The government of that time intervened through the NNPCL. They got him a facility of $1 billion to support what he was doing because at that point he got stuck,” Shedrack disclosed. “That was an intervention for him. I don’t think any businessman in Nigeria, any company, has enjoyed such leverage from the government.”
Despite this substantial support, Shedrack criticised Dangote for continuing to seek further concessions from the government. He argued that the refinery’s financial struggles were not merely due to external factors but were also a result of inadequate initial planning.
Shedrack’s remarks suggest that the refinery’s reliance on government intervention could set a dangerous precedent for other private enterprises in Nigeria, where business ventures might expect similar bailouts instead of proper financial and operational planning.
Pressure on the Government: A Push for Rule-Bending
One of the most damning accusations made by Shedrack during the interview was that Dangote is now pressuring the Nigerian government to bend existing regulations to favour his refinery. Shedrack claimed that the Dangote Group is seeking preferential treatment in the form of heavily discounted crude oil and other financial incentives, which could have far-reaching consequences for the country’s oil sector.
“Dangote seems to be wanting the government of the day to bend the rules for him,” Shedrack asserted. “If the government does this, there is every tendency that some of these international oil companies will begin to leave Nigeria. And that is going to affect us so terribly; while we’ll be losing royalties, we’ll be losing taxes that they pay.”
Shedrack’s comments reflect a broader concern about the impact of such preferential treatment on Nigeria’s economic stability and its relationship with international investors. The departure of IOCs from Nigeria would not only reduce the country’s oil production capacity but could also lead to significant revenue losses from taxes and royalties, which are vital for funding government operations.
The Crude Supply Dispute: Dangote vs. NUPRC
The immediate cause of the current controversy stems from Dangote’s accusation that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has failed to enforce domestic crude supply obligations, leaving the refinery with insufficient crude oil to meet its production targets.
The Dangote Group claimed that it had not received the full volume of crude oil that was promised, leading to delays and operational inefficiencies at the refinery.
However, Shedrack offered a different perspective. He challenged Dangote’s assertion, stating that the refinery has, in fact, received substantial crude oil supplies from the government.
According to Shedrack, as of the date of the interview, Dangote had already received 39 vessels of crude oil, a fact he dared the business magnate to deny.
“I have verifiable information that as of today, Dangote has received about 39 vessels of crude oil from the government,” Shedrack revealed. “Let him come out and deny that fact.”
Shedrack’s challenge underscores the need for transparency and accountability in the ongoing dispute. He urged the Dangote Group to back its claims with concrete evidence rather than relying on what he described as “sentiment and half-truths.”
International Implications: The Malta Connection
The conversation also touched on allegations of increased trade between Nigeria and Malta, with suggestions that certain interests in the Nigerian market might be deliberately undermining the success of the Dangote Refinery.
When asked about these allegations, Shedrack acknowledged that he had heard the accusations but noted that he did not have direct evidence to support or refute them.
“I heard the accusation from Mr Dangote. I don’t stand a better chance to address that. And I had expected Mr Dangote to come out with proof that what he was claiming, there is verifiable evidence of what he was claiming,” Shedrack remarked.
The mention of Malta points to broader concerns about the international dimensions of Nigeria’s oil trade and the potential for external influences to shape the success or failure of major projects like the Dangote Refinery. While Shedrack did not delve into specifics, his comments highlighted the complexity of the issues at play and the need for a thorough investigation to uncover the truth.
The Broader Economic Context: Risks and Consequences
Throughout the interview, Shedrack repeatedly emphasised the potential risks of bending the rules for Dangote, warning that it could lead to significant economic and social consequences for Nigeria. He argued that if the government were to yield to Dangote’s demands, it could set off a chain reaction that would destabilise the oil sector and erode public trust in the government’s ability to manage the country’s resources effectively.
“If this rule is bent for him, we’ll begin to lose money. The royalties paid to us and the taxes paid by these IOCs, we’ll begin to lose them,” Shedrack cautioned. “And the implication is that there will be security challenges. People will be on the street because, at that point, the government might not have funds to finance governance. And there will be total anarchy.”
Shedrack’s stark warning reflects broader concerns about the sustainability of Nigeria’s current economic model, which remains heavily reliant on oil revenues. As the country grapples with rising inflation, unemployment, and social unrest, the stakes of the Dangote Refinery dispute are higher than ever.
Conclusion: A Call for Accountability and Transparency
In concluding his remarks, Shedrack called on the Nigerian government and the Dangote Group to address the current crisis with a commitment to transparency and accountability. He urged all parties involved to put the interests of the Nigerian people first and to avoid actions that could further destabilise the country’s fragile economy.
“We’ve gotten to that point where we will begin to address issues based on facts and figures,” Shedrack concluded. “Let the right thing be done.”
As the Dangote Refinery saga continues to unfold, Shedrack’s insights offer a sobering reminder of the complexities and challenges involved in large-scale industrial projects. The coming weeks and months will be crucial in determining whether the refinery can overcome its current difficulties and fulfill its promise as a transformative force in Nigeria’s oil sector.
For now, the spotlight remains firmly on the Dangote Group, the Nigerian government, and the international oil companies that hold the key to the refinery’s success.
