An oil refinery being built by Aliko Dangote would account for half of his conglomerate’s assets when it was finished in 2019, a senior executive told Reuters, underscoring the scale of the bet being made by Africa’s richest man on Nigerian oil and gas. Dangote built his fortune on cement, though his sprawling business empire also spans flour milling, agriculture and real estate. Now he is building the world’s largest single oil refinery and also expanding into fertiliser, aiming to tackle long-standing problems in Nigeria’s energy markets.
Though Africa’s biggest crude oil producer, Nigeria imports almost all its petrol due to poor maintenance of its four state-owned refineries. Dangote hopes to meet the fuel needs of the entire country.
Dangote group executive director Devakumar Edwin said the $10bn refinery should be completed by December 2019.
“As of today, cement is the biggest part of the group. By 2020 the refinery will be the biggest by assets,” he said at the site in the Lekki district of southwestern Lagos state.
Dangote Cement, Nigeria’s biggest listed company, has attracted investment from Dubai and South African investment funds. It posted a profit in 2017 of 289.6-billion naira ($920.8m) — up 60% on 2016 — and is valued at $4bn.
Edwin said the oil refinery, with a capacity of 650,000 barrels per day, would also target export markets.
“Our primary focus is Nigeria, to meet the entire local demand, but we have capacity to export more than 50% 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.
The Dangote refinery 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. The remainder will be funded by equity and through export agencies, Edwin said.
Dangote has 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 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 said.