In a candid revelation, former President Olusegun Obasanjo recently shared a story about what could have been a game-changing moment for Nigeria’s struggling oil refineries. Back in 2007, during his administration, Obasanjo actively sought solutions to revive the country’s aging refineries. However, one of the most promising proposals — a $750 million offer from Africa’s richest man, Aliko Dangote — was rejected.
The Search for Expertise
At the time, Nigeria’s refineries in Port Harcourt, Warri, and Kaduna were facing severe operational challenges. In a bid to salvage the situation, Obasanjo reached out to global oil giant Shell, inviting them to manage the refineries. But Shell turned down the offer, citing several reasons:
Profit Priorities: Shell explained that their focus was primarily on upstream operations, which are more profitable, while downstream activities, like refinery management, were not their stronghold.
Capacity Issues: Shell noted that Nigeria’s refineries, with capacities ranging from 60,000 to 120,000 barrels per day, were too small compared to the global standard of 250,000 barrels per day.
Maintenance Gaps: The refineries had suffered years of neglect and poor maintenance, making them a risky venture for any external manager.
Corruption Concerns: Shell expressed worries about the deep-rooted corruption within Nigeria’s oil sector, which they feared could hamper any efforts at efficient management.
Dangote’s Ambitious Offer
With Shell out of the picture, Aliko Dangote stepped forward with a bold proposal. Dangote assembled a team of experts and offered to manage the refineries under a public-private partnership, backed by a $750 million investment. His plan aimed to bring private sector efficiency into the management of these vital assets.
However, when Obasanjo left office, his successor reversed the decision. Dangote’s investment was refunded, and the Nigerian government, led by the Nigerian National Petroleum Corporation (NNPC), opted to retain full control of the refineries. The NNPC assured the government that they could handle the refineries’ operations better than any external partner.
The Aftermath
Years later, Obasanjo remains skeptical about that decision. Reports suggest that over $2 billion has been poured into the refineries since then, yet they remain far from operational. The failure to achieve efficiency has left many wondering whether Dangote’s involvement could have been the solution Nigeria needed.
Interestingly, Dangote has since shifted his focus to building his own private refinery, which is poised to become the largest in Africa. Obasanjo has expressed confidence in Dangote’s private initiative, suggesting that it might succeed where government-controlled projects have failed.
A Lesson in Missed Opportunities
The rejection of Dangote’s $750 million offer serves as a poignant reminder of the complexities of managing public assets in Nigeria. Could private-sector partnerships hold the key to solving Nigeria’s refinery woes? The story of Dangote’s unfulfilled offer leaves us pondering what might have been.
What do you think about this missed opportunity? Should Nigeria revisit the idea of public-private partnerships for critical infrastructure? Share your thoughts in the comments below or join the conversation on NIGPOST’s social media channels!
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