The Hand of Aliko, the Voice of Kelvin: Inside Dangote Refinery’s Media Stunt Lab
By Ibrahim Y. Kabo
Ordinarily, I would not join issues with a certain Kelvin Emmanuel on his so-called analysis of the oil and gas sector of the Nigerian economy. Someone who has not seen the inside of a refinery before Dangote built one, let alone understood the mechanism of the energy industry is assuming the role of an authority in oil and gas matters. If he was trying to get the attention of Aliko Dangote when he started out, he obviously has succeeded in his enterprise. Now, he is in their payroll, spewing further rubbish the paymaster may be too restrained to utter. But it makes no difference to those of us who have given our all to this industry. We can smell the intent from a thousand miles; and, we will fact check both Aliko and his minions, and correct their half-truths and misconceptions. It seems NMDPRA sees Dangote’s claim as laughable, and perhaps NNPC also chooses to be the bigger party by not joining issues with Dangote with his many falsifications of intent and his preoccupation to hiding behind a finger as to his business intentions.
What concerns me more here is to set the records straight. To speak out for those who are in business to serve their fatherland and build this great nation. Aliko Dangote has not minced words in telling whoever cares to listen that his interest in refining is not availability but profit maximisation. NNPC’s mandate is to provide energy security and affordability in a sustainable fashion. With Dangote Refinery on one hand and the marketers on the other hand, the NMDPRA is the body that regulates the sector.
Without enough knowledge and having a disdain for regulatory oversight, Dangote himself was the first to throw a salvo. In an interview, he blatantly accused the NMDPRA Chief Executive of being incompetent and the agency of lacking equipment. Suddenly, every other product becomes sub-standard. His choice of language was the first giveaway. Labelling the standard giver together with calling competition sub-standard is standard practice for would -be monopolists. But little did he know that the current administration would not pander to him, even as his efforts are acknowledged.
I would take time to list some of the areas where the Dangote lackey has lied outright or has chosen to be economical with the truth. He may have been paid for his media stunts, but those with genuine interest in the oil industry will call him out on his falsehoods.
The truth is Dangote Industries (not only Dangote Refinery) needs NNPC more than NNPC would ever need Dangote business. Just recently, Dangote was all smiles as he shook hands with one of the MDs of an NNPC subsidiary, after he inked a deal to supply gas to his nascent refinery. What Dangote would not tell you is that 90 per cent of his so-called businesses rely on NNPC gas and LPFO to function. He would also not tell you that he gets the gas cheapest from NNPC, and yet would default in payment. If there’s a single company that owes NNPC so much for services rendered, it would be Dangote Industries.
For Kelvin Emmanuel, I see a lot of huffing and puffing, devoid of actual knowledge of the inner workings of international trade exemplified in the oil and gas business. I guess his mandate was simple: talk down on Minister, talk down on industry regulators and talk down on NNPC. And, as he moved from one media house to another, on the paid jamboree facilitated by Aliko Dangote, he tries to sell Dangote Refinery to us as the next big thing. A number of his submissions will astound or amuse you.
1. Kelvin, while talking to a TV station, actually called for the Chief Executive of NMDPRA to be sacked for daring to speak on the status of the Dangote Refinery inauguration. The surrogate opined that regulators should not exist again, in obeisance to the fact that Dangote built a 20-billion-dollar facility. Maybe someone should tell him the scale of projects being undertaken in the oil industry by known names in energy worldwide. EGINA FPSO was built in 2014 at a cost of over 16 billion dollars. Nobody from Totalenergies is threatening the industry regulators with fire and brimstone for daring to regulate a multibillion-dollar investment. If anything, they are happy to work with both government and industry for a more harmonious approach to solving industry challenges. The same goes for other major investments at Erha, Agbami, Bonga and LNG train 7. NMDPRA officials are authorised to be on site, and will continue to supervise the refinery’s operations. No amount of bellyaching will stop that.
2. In another interview, emergency expert Kelvin, echoing his paymaster’s position, said only Dangote Refinery’s products meet specifications while others are all sub-standard. The obvious question is: whose specifications? For a refinery that has barely made 4 of 7 pre-inauguration certifications, it sounds somehow laughable to suddenly assume the role of regulator in an industry you’ve barely entered.
3. Lack of planning or lack of due diligence on the part of the proponents of Dangote Refinery ahead of inauguration should not be blamed on other stakeholders. In one of his media stunts, Kelvin actually suggested that Dangote’s inability to secure feedstock for his refinery was the government and NNPC’s fault. For a refinery that had about 7 years construction phase, you’ll expect a seasoned investor to, at least, know he has to secure his source of crude supply ahead of time. The global industry runs on plans like a clockwork, with refineries locking in supplies up to five years ahead. But our monopoly-seeking chief thought everyone has to abandon their equity oil and production quotas just to serve his business interests.
4. From all his interviews and pretensions to be an industry expert, one thing is obvious: Kelvin lacks an understanding of both the mandate and the reach of NNPC as a national oil company. Downstream is the least of NNPC’s business interests. The mandate, as per PIA, is to facilitate both the extraction and commercialization of Nigeria’s oil and gas resources. 20 billion dollars may be a lot , but NNPC and industry regulators routinely handle projects of that magnitude. At best, Dangote and Kelvin’s rantings are an irritation. I believe that’s why NNPC openly declared it was not interested in being Dangote’s off taker.
5. Kelvin actually alleged in an interview that he believed IOCs and other industry players were trying to sabotage Dangote interests. Nothing could be further from the truth. From supplying gas to various Dangote companies across Nigeria, to actually being an investor in the same refinery, what other proof of faith does anyone need. I learnt the area of divergence came when Dangote wanted to milk Nigerians by extracting a premium applicable in international transaction and NNPC said no. This is after the same Dangote had refused to pay a premium even when NNPC had compelled other JV partners to honour domestic crude oil obligations and support his business. What Dangote and his lackey may not realize is that oil, despite being found locally, is an international commodity. To get patronage, you’ll have to offer cheaper overall cost for specified standards. Resorting to blackmail and reference to “premium “product will not be enough to sustain customer interest, if the products can be sourced cheaper elsewhere. Nobody should offer Dangote false hope here: there are many modular refineries that are already operational, with many more still on the way. Crying wolf where there’s none is certainly not a way to be the preferred Dangote option.
6. Kelvin went as far as alleging that NNPC does not have money to pay for Dangote’s products. Why then is the refinery hell bent on asking NNPC to be its off taker if it is so convinced? I only hope Dangote will stop hiding behind a finger by using a paid agent to abuse those he needs to court. Like I’ve said elsewhere, the oil industry does better with collaboration. Grandstanding and insult are the easiest ways to not only lose credibility in this industry, but also a fast way to lose a fortune. Enough said.
•Kabo, a petrochemical engineer, sent in this piece from Lagos.
