Aliko Dangote, recently revealed plans to establish an oil trading arms, based in London, to help run crude and supply product for his new refinery in Nigeria.
The largest international trading companies have been negotiating for months to give the refinery funding and crude oil in exchange for product exports; Reuters reports that the move would lessen their influence in this regard. The trading world is intently observing the operation of the massive refinery, which has the capacity to produce 650,000 barrels of fuel per day, as it has the potential to impact global oil and fuel flows.
Reuters made it clear that Dangote whose wealth as stated by Forbes is at $12.7billion naira, did not reply to several comment requests.
The agency noted that loans of about $3bn in working capital which the refinery needs to buy large amounts of crude, has been offered by the likes of BP, Trafigura, Vitol, among others, while they met with Dangote in Lagos and London.
However, Dangote worries that the proposal would reduce his control and potentially his profit, as the trader asked him to repay loan with fuel export but so far, they are yet to sign any deal, the source added that, Dangote has also met state-backed firms in his search for cash and crude.
“He is going to try and do it himself,” an industry source said. Sources said the new trading team will be led by former Essar trader Radha Mohan. He joined Dangote in 2021 as director of international supply and trading, according to his Linkedin profile. Two sources said the team was in the process of hiring two new traders.
The refinery took a decade to complete and came in at a cost of $20 Billion naira about $6 billion naira over budget.
It will take months for the plant to reach full capacity, having refined around 8 million barrels of oil in January and February.
Till date, Trafigura has exchanged some crude oil for upcoming gasoline cargoes, while Vitol has paid in advance for some product shipments to assist the refinery in purchasing crude, according to knowledgeable sources.
