It was a sunny day in December and the Crème of the Nigerian elite society were gathered at a sleepy town in Ogun State, a few miles away from the hustle and bustle of Lagos. The vice president, Yemi Osinbajo was present, as well as present and former governors, senators, and ministers. There were also top business executives and military officers in attendance.
The event was not a political meeting, neither was it a business conference. It was the commissioning of the Petrolex mega oil city and the announcement of the take-off of a 250,000-barrel refinery. In an era of inadequate supply of petroleum products to meet teeming demands, and concentration of storage facilities in areas with population concentration, the bold move by Petrolex has been touted as a game changer.
Sitting atop Petrolex oil and gas, is its chairman, Olusegun Adebutu, the astute businessman who has succeeded in pioneering a ground-breaking project in the Nigerian oil and gas industry. For many, Petrolex was not a name that rang a bell three years ago but the company has risen from obscurity to arguably take over the downstream and midstream sectors of the industry. Today, he is one of the 50 most influential Nigerians, according to the Businessday Newspaper.
Adebutu is a member of one of the most powerful families in South West Nigeria and an offspring of one of the wealthiest businessmen in the country; Kensington Adebutu. Segun must have had a lot of mentorship from his father, who made lottery games popular in Nigeria and his premier Loto still dominates the industry today. Premier Loto is so successful that Nigerians call the entire loto business ‘Baba Ijebu’, after Kensington’s alias. The Ijebu chief from Iperu Remo built an industry-defining business that has transcended generations and provided an enviable legacy.
Like his father, Segun Adebutu is building his own industry-defining empire. Petrolex’s legacy investment is the mega oil city. Adebutu and his team carved out 30,000 acres of pristine swamp forest and are gradually developing it into thriving petrochemical hub that is expected to supply a sizable part of the country’s petroleum products consumption and create a significant impact on the economy. The mega oil city is strategically located; accessible by inland waterways connected to the Lagos lagoon.
It is expected to create over 10,000 jobs. The first phase of the project has been completed and commissioned. It is the 300 million litres mega tank farm, consisting of 20 15 million litre storage tanks. The tank farm has 30 loading gantries with a scheduled truck loading and fuel management system, and a 4000-truck capacity trailer park for efficient loading. To supply the facility and ensure ease of distribution, a jetty has been constructed and vessels moored.
The Petrolex fleet consists barges, tug boats, and a mother vessel. The total investment into the facility is about $330million. With the completion of the tank farm, Adebutu has pioneered a milestone in the Nigerian oil and gas industry downstream; he has built the largest tank farm in sub-Saharan Africa. The facility has the capacity to turn out 7.2 billion litres of petroleum products annually. Presently, West Africa consumes about 22 billion litres of PMS and 11 billion litres of AGO annually, with imports accounting for 90% and 70% of these respectively. The Petrolex tank farm is expected to account for over 30% of consumption within the next few years.
The tank farm is but a fraction of what is being developed at the mega oil city. Over the next 5 years, Petrolex plans to invest up to $5billion into developing various monumental projects at the site. The biggest of these is a 250,000 barrels per day refinery, which will be sub-saharan Africa’s second largest when completed. This massive, laudable project will be a significant factor in determining the future of the Nigerian economy. According to a report on Bloomberg, “Nigeria, Africa’s biggest oil-producing nation, doesn’t have adequate refining capacity and imports at least 70 percent of its needs. A government pledge to end such purchases in the next two years by building local capacity has lured investors including Africa’s richest man, Aliko Dangote, who is constructing a 650,000-barrel-a-day refinery.” Adebutu has joined Dangote as the only two Nigerians currently building refineries. Besides the refinery, Petrolex plans to build a fertilizer plant, lubricant facility, and a liquefied gas plant, all on the site.
Segun Adebutu’s adventure into the oil and gas industry has been a journey undertaken in steady, giant strides. Each step has been a monumental project with significant national-impact. Perhaps it will take time before we can adequately figure out the effect of his initiatives on the well being of the nation. Nevertheless, we can confidently say that his projects have made the future look less bleak and increased possibilities.