Oil Refining To Overtake Cement As Dangote Group’s Biggest Asset By 2019

Dangote Group, owned by Africa’s richest man, Alhaji Aliko Dangote, says its ongoing oil refinery, the world’s single largest, will account for half of its assets when completed next year.

In a chat with Reuters, Dangote Group’s Executive Director, Devakumar Edwin, said the $10bn 650,000 barrels per day capacity refinery billed for completion in December 2019, underscoring the scale of the bet being made by Africa’s richest man on the Nigerian oil and gas.

“As of today, cement is the biggest (part of the group). By 2020, the refinery will be the biggest (by assets),” he told Reuters in an interview at the site in the Lekki district of southwestern Lagos.

Before now, Dangote built his fortune on cement, flour milling, agriculture and real estate, just as the oil refinery is expanding into fertiliser, aiming to address long-standing problems in Nigeria’s energy markets.

Dangote hopes to meet Nigeria’s fuel needs and help save huge foreign exchange spent on products import due to poor maintenance of its four state-owned refineries, at a time most families and businesses rely heavily on generating set for power supply.

Dangote Cement, Nigeria’s biggest listed company, has attracted investment from Dubai and South African sovereign funds.

“Our primary focus is Nigeria, to meet the entire local demand, but we have the capacity to export more than 50 percent of what we produce, so the secondary focus will be on western Africa and central Africa,” he said.

Edwin said the company had held talks with firms including Vitol and Shell over the supply of crude and lifting of petroleum products for sale abroad, as it will be able to process different grades of crude including shale oil.

The company is borrowing $3.3bn for the project, arranged by Standard Chartered Bank, while the remainder will be funded by equity and through export agencies, Edwin added.

Dangote has also acquired two oil fields in Nigeria from Shell to help supply the refinery.

Edwin said the first phase of the 1.5 million tonne capacity fertiliser plant, on the same Lagos state site, would be completed in September and start operating in December. The second line, also 1.5 million tonnes, will start four months later, he added.

The refinery and petrochemical complex located on 25,000 hectares of swampy land includes a jetty to ferry products by sea within Nigeria and abroad and an undersea pipeline to transport gas.

Dangote will consider listing the oil refinery once it comes onstream, Edwin added.

He said that would follow a planned listing of the cement company in London next year after elections in Nigeria. That listing has been mooted for a number of years.

Plans have been delayed to enable the company to meet requirements for the listing, which Edwin said had been completed. He said the listing could help it fund acquisitions overseas.

https://investdata.com.ng/2018/07/oil-refining-overtake-cement-dangote-groups-biggest-asset-2019/#more