Dangote plans oil trading arm
Africa’s richest man, Aliko Dangote, was planning to set up an oil trading arm, likely based in London, to help run crude and product supply for his new refinery in Nigeria, six sources familiar with the matter said.
The move would reduce the role of the world’s biggest trading firms, which have been negotiating for months to provide the refinery with financing and crude oil in exchange for exports. The giant 650,000barrel-a-day refinery is set to redraw global oil and fuel flows, and the trading community is watching closely.
Dangote, whose wealth is estimated by Forbes at $12.7bn, did not reply to several comment requests.
BP, Trafigura and Vitol, among others, had met Dangote in Lagos and London in recent weeks to offer loans for the $3bn in working capital the refinery needs to buy large amounts of crude, trading sources said.
The traders asked the refinery to repay loans with fuel exports but so far they had signed no deals as Dangote worried they would reduce his control of the project — and potentially his profit, the sources said. Dangote has also met statebacked firms in his search for cash and crude. “He is going to try to do it himself,” an industry source said.
Sources said the new trading team would 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 nearly a decade to complete and came in at a cost of $20bn, about $6bn over budget.
The plant refined about 8million barrels of oil between January and February and will take months to get to full capacity. So far, Vitol had prepaid for some product cargoes to help the refinery buy crude, while Trafigura had swapped some crude oil in exchange for future fuel cargoes, sources with knowledge said.
Vitol and Trafigura declined to comment.