Aliko Dangote, Africa’s wealthiest individual and President of the Dangote Group, is reportedly eyeing the establishment of an oil trading firm in London to oversee crude and product supply for his newly launched $15 billion refinery in Ibeju-Lekki, Lagos.
According to Reuters, sources familiar with the matter revealed this strategic move on Tuesday, indicating a desire to reduce reliance on major trading firms for financing and crude oil.
“The giant 650,000 barrel-per-day refinery is set to redraw global oil and fuel flows, and the trading community is closely watching the way it will operate,” a source Reuters quoted, said.
Major trading entities such as BP, Trafigura and Vitol, among others, have met Dangote in Lagos and London recently to offer loans for the $3 billion in working capital the refinery needs to buy large amounts of crude
However, no agreement has been reached so far, as Dangote is cautious about potential loss of control over the project and profits.
The suggested repayment method involved fuel exports, but Dangote, concerned about maintaining project control, is exploring the possibility of establishing an in-house trading team.
“He is going to try and do it himself,” an industry source told Reuters.
Industry sources disclosed that ex-Essar trader Radha Mohan, who joined Dangote in 2021 as Director of International Supply and Trading, is expected to lead the new trading team. The team is reportedly in the process of hiring two additional traders.
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The Dangote Petroleum Refinery, launched on May 22, 2023, in Ibeju-Lekki, Lagos, with a planned production commencement in January 2024, has yet to start operations.
Nigerians eagerly await the initiation and domestic supply of Dangote Refinery products, anticipating its significant impact on the country’s petroleum landscape.
