Reps to probe alleged sabotage against Dangote Refinery by IOCs

The House of Representatives has resolved to set up an ad hoc committee to investigate the alleged conspiracy by international oil companies (IOCs) against Dangote Refinery.

The yet-to-be-constituted committee will also probe the inability of NNPC Limited to acquire the 20 per cent stake in the Dangote refinery, a 650,000 barrels per day refinery located in the Lekki Free Zone near Lagos.

The committee is to submit a report to the House within four weeks.

This resolution follows a motion of urgent public importance moved by the Minority Leader, Kingsley Chinda (PDP, Rivers), on Thursday.

Background

Last month, the Vice President of Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin, accused IOCs in Nigeria of doing everything to frustrate the survival of Dangote Oil Refinery and Petrochemicals.

Mr Edwin claimed that IOCs are refusing to make crude oil available to domestic refiners, an action that would frustrate the multi-billion-dollar refinery.

He stated that IOCs prefer to sell crude to international trading arms, who then sell it at a margin.

Mr Edwin highlighted that when cargoes are offered to the oil company by the trading arms, they are sometimes at a $2-$4 (per barrel) premium above the official price NUPRC sets.

NNPC Limited had earlier announced plans to acquire a 20 per cent stake in the refinery.

However, Aliko Dangote recently announced that the state-owned oil company failed to pay the agreed sum within the stipulated time.

“NNPC Limited no longer owns a 20 per cent stake in the Dangote refinery. They were meant to pay their balance in June but have yet to fulfil the obligations. Now, they only own a 7.2 per cent stake in the refinery,” Mr Dangote told journalists.

The Motion

In the motion, Mr Chinda said the alleged conspiracy undermines the refinery’s performance from complete optimisation.

“The alleged conspiracy against Dangote refinery relates to efforts by the IOCs to deliberately frustrate the refinery’s ability to buy local crude oil by manipulating and increasing the premium price above the market price,” he said.

Mr Chinda added that “whilst the IOCs are keen on exporting raw materials to their home countries and thus creating wealth and employment for their countries, thereby adding to their GDP, Nigeria continues to be a dumping ground for refined products, thus making us dependent on imported petroleum products.”

Consequently, the House urged the federal government, the NUPRC, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and well-meaning Nigerians to support Dangote Refinery to succeed.

READ ALSO: Dangote Refinery insists IOCs are frustrating its crude supply

They also urged the Ministry of Petroleum Resources and all relevant MDAs to take urgent steps and intervene in the crude oil supply to Dangote Refinery.

This motion was not debated and when it was put to a vote by Speaker Abbas Tajudeen, the lawmakers voted in support.