newoal
We have followed with interest the ongoing impasse between Dangote Petroleum Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The issue at stake transcends commercial disagreement. It strikes at the heart of a fundamental development question: the sovereignty of Nigeria’s governance process over its hydrocarbon resources.
The paradox is striking: Nigeria now has a $20 billion refinery—one of the world’s largest—yet we continue importing petroleum products. A private investor has built the refining capacity our nation desperately needs, but faces systematic undermining from the very regulatory authority whose mandate is to support such investments. When government policy actively frustrates transformative local investment, we must question whether our economic strategy serves national interest or perpetuates dependency. The issues here—local refining, poverty alleviation, employment, industrial development—go far beyond commercial dispute. They touch the fundamental question of how Nigeria governs its most valuable resource.
This situation exemplifies the conflict between two fundamentally different approaches to petroleum governance. Nigeria currently operates under “Contract Oil”: a system where petroleum is treated merely as a commodity for extraction and export, with value addition and job creation systematically externalized to foreign entities. We export raw crude only to import refined products at premium prices, perpetuating dependency rather than fostering development.
Saudi Arabia demonstrates the alternative—”Development Oil”—using petroleum resources for comprehensive national transformation. The Kingdom does not permit any operation that undermines its local capacity. This has delivered over 500 vessels in its maritime fleet, comprehensive downstream capacity including world-class refineries, and absolute control over the petroleum value chain. Nigeria operates with no such vessels despite being Africa’s largest oil producer.
Section 44(3) of the Nigerian Constitution mandates that oil and gas resources “shall vest in the Government of the Federation and shall be managed” for the welfare and security of Nigerian citizens. When regulatory actions frustrate investments that create local capacity, generate employment, and reduce import dependency, they violate constitutional obligation. The current situation where a domestic refinery struggles to secure crude feedstock while import licenses continue flowing represents fundamental failure of this constitutional responsibility.
This is not merely about one refinery or one company—it is about whether Nigeria will continue the failed Contract Oil approach that has produced seven decades of resource curse, or embrace Development Oil principles that align hydrocarbon management with constitutional obligations and national development imperatives. This is a defining moment between sovereignty and dependency, between development and extractive stagnation, between constitutional compliance and commercial expediency.
We urge all stakeholders to recognize the profound implications of this dispute and work toward resolution that serves Nigeria’s constitutional obligations, development imperatives, and long-term national interest.
Collins Okeke
Partner & Head of Government Affairs
Dr. Olisa Agbakoba SAN
Senior Partner
Olisa Agbakoba Legal
OAL Energy and Natural Resource Practice Group