Aliko Dangote don decide to build one $16 billion oil refinery for Kenya. Di plan dey raise obvious question as global transport industry dey shift towards electric vehicles, and Kenya itself don struggle for more than ten years to turn im crude discoveries into sustained commercial production.
Di proposed 700,000-barrel-per-day refinery for Lamu stand in sharp contrast to Kenya own oil prospects. Di country still dey struggle to commercialise crude wey dem discover for South Lokichar Basin in 2012.
A limited early oil pilot never develop into sustained production. British oil explorer Tullow Oil, wey lead development of di Turkana fields, agree in 2025 to sell im Kenyan interests to Gulf Energy after years of financing and infrastructure delays.
Kenya now target initial output of about 20,000 barrels per day, rising towards 50,000 from 2032. Earlier projections put eventual production at 120,000 barrels per day. Even under that higher projection, domestic crude would cover only about 17 per cent of Dangote planned refinery capacity, while initial output would meet less than 3 per cent.
That production gap make Dangote experience in Nigeria especially relevant. Despite being one of Africa largest crude producers, di country show him say domestic oil no guarantee a refinery reliable or competitively priced supplies.
Im Lagos refinery was built partly to address one of Nigeria biggest petroleum contradictions. Di country dey export crude while importing large volumes of petrol and diesel because im state-owned refineries remain largely ineffective.
Di project eventually cost about $20 billion and suffer years of delays before production begin. But Dangote still struggle to secure enough Nigerian crude after commissioning and at times import supplies from overseas, including the United States.
That experience appear to don shape im thinking in Kenya, where access to a deep-water port and a large regional market may matter more than substantial domestic crude production.
Dangote don directly challenge di assumption say a refinery must sit beside an oilfield. “An oil refinery doesn’t have to be set up where crude oil is,” he talk ahead of di groundbreaking, citing Singapore and India as examples of countries wey develop major refining industries despite having little domestic crude.
That thinking dey central to understanding Lamu. Im naturally deep harbour can receive large crude carriers, while im position on di Indian Ocean and di LAPSSET corridor give Dangote access to international oil supplies and a potential gateway into East African markets.
“Crude will come from all the East African countries that are producing oil; we will give them the priority, and then we will get more from the Middle East and everywhere,” Dangote talk.
Di billionaire had considered Tanga in Tanzania and Mombasa before choosing Lamu, citing im land, water supply and sea depth as better suited to a refinery of this scale. “The most suitable place where we realised we can put up this refinery, where we have enough water, we have depth in terms of the sea, and we have land is Lamu,” he talk.
Di location, however, solve only part of di equation. Kenya cannot consume enough fuel to sustain di refinery at high capacity, forcing Dangote to secure markets in Uganda, Ethiopia, Rwanda, Burundi, South Sudan and beyond, while competing with established importers and Uganda planned 60,000-barrel-per-day Hoima refinery.
Beyond that, securing regional markets na only part of di challenge. Dangote must also bet say fuel demand go remain strong even as electric vehicles reshape global transport. Di International Energy Agency expect EVs to displace millions of barrels of daily oil demand by di end of di decade, creating a long-term risk for a refinery built to operate for decades.
Dangote, however, argue say oil demand extend beyond road transport. “Oil is here to stay for a very, very long time,” he talk, noting say di Lamu plant go produce petrol, diesel and jet fuel, as well as polypropylene and base oils.
That distinction matter because EVs can reduce petrol demand without eliminating aviation fuel, heavy transport, petrochemicals, lubricants or plastics. Energy analysts expect Africa oil demand to remain resilient for decades, while OPEC project global consumption go continue rising through 2050, supporting Dangote bet say East Africa could move through di energy transition more slowly than Europe, China and other advanced markets.
That wager also get powerful counterpoint in di United States, di world largest oil producer, where President Donald Trump return to office promising to “drill, baby, drill” and expand fossil-fuel production, slowing di momentum of di EV-led shift in one of di world biggest energy markets.
Even so, Dangote gamble remain significant because di refinery could come onstream just as global refining competition intensify and road-fuel demand begin to flatten.
For an exclusive interview with BBC Focus on Africa Nkechi Ogbonna, Dangote answer quick-fire questions on a wide array of topics, from di main problem of di continent to di opportunities for im youth and Africa main strengths.
“Nobody can make Africa great but us,” na di words of Africa richest man Aliko Dangote as he urge Africans to take di fate of dia continent in dia own hands, rather than relying on foreigners.
