Nigeria's oil industry - FT.com What a pity oil refineries cannot be disassembled, packed, and shipped. Dangote Industries, the Nigerian conglomerate, could then save a big chunk of the $9bn it says it intends to spend building a refining and petrochemical complex in Nigeria. Europe, for example, is dotted with superfluous refineries (see Petroplus). Building a downstream operation is a vast undertaking. The question is whether the Nigerian oil and gas industry can support it. Nigeria has made a mess of exploiting its oil riches. Shell, the largest foreign investor in the industry, says that about 100,000 barrels of oil are stolen every day in the country, which could be costing the government $12bn in lost revenue annually. Nigeria's daily output fell below 2m barrels in July as a result of theft, sabotage and lack of investment. Upstream problems also plague the downstream - Nigeria runs up a large import bill every year for fuel products. Dangote reckons this bill could be cut by 50 per cent when its plant, with a refining capacity of 400,000 b/d, comes into operation after 2016. Aliko Dangote, the group's founder and Africa's richest man, should use the incentive of his investment to push the government into reforming its oil and gas industry. Above all, this means creating a proper market in oil products, including petrol. Subsidies undercut the true value of Nigeria's oil reserves. Other parts of the Nigerian economy are booming; it is about time the oil and gas sector was modernised. Reform attempts are currently in limbo. Mr Dangote's plan would double Nigeria's refining and petrochemical capacity. That is an opportunity for a fresh attempt, as well as offering the chance to upgrade its infrastructure. Nigeria needs to extract maximum value from its oil reserves. Unless there is reform of its oil and gas industry, it will not be able to do so.