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Aliko Dangote plans oil trading firm for new refinery supply

Wednesday, 06 March 2024 18:02
Aliko Dangote plans oil trading firm for new refinery supply

(Ecofin Agency) - Nigerian billionaire Aliko Dangote is planning to establish an oil trading company to manage crude supply for his new refinery in Nigeria, Reuters reported on Tuesday, March 5, 2024, citing sources familiar with the matter.

The new oil trading arm of Dangote Group, expected to be based in London, would allow Dangote to do without global trading giants like Trafigura and Vitol. These firms have been in negotiations for months to supply the mega-refinery with crude oil in return for shipments of refined products.

According to Reuters, representatives from several major international oil trading firms, including BP, Trafigura, and Vitol, have met with Dangote in Lagos and London in recent weeks. They proposed loans to provide the refinery with the $3 billion in working capital needed to purchase large quantities of crude. However, sources indicated that no deal has been signed yet, as the Nigerian billionaire fears a reduction in his control over the project and its profits.

The sources also revealed that Dangote has already selected Radha Mohan, a former trader from the Indian conglomerate Essar, to lead his upcoming trading company.

The Dangote Refinery, Africa's largest with a capacity of 650,000 barrels per day, began its export operations in mid-February, delivering its first shipment of refined petroleum products to Trafigura.



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ECOFIN AGENCY offers a selection of articles translated from AGENCE ECOFIN. Founded in 2011, Agence Ecofin is a leader in Francophone Pan-African economic news, particularly in West and Central Africa. The agency publishes daily news on nine African economic sectors: Public Management, Finance, ICT, Agribusiness, Energy, Mining, Transport & Logistics, Communication, and Training.

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