President of Dangote Group, Aliko Dangote, is planning to set up an oil trading firm that would be based in London as part of strategies to help run crude and product supply for the Dangote Petroleum Refinery located in Lekki, Lagos, Nigeria.
Six sources familiar with the matter told Reuters on Tuesday that “the giant 650,000 barrel-per-day refinery is set to redraw global oil and fuel flows and the trading community is closely watching the way it will operate.”
Nigeria’s former President, Muhammadu Buhari, inaugurated the Dangote Petroleum Refinery on May 22, 2023. The plant has commenced the refining of crude to produce diesel and aviation fuel, but is yet to release the products to the Nigerian market.
Reuters reported on Tuesday that the plan by Dangote to set up an oil trading firm in London 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 products’ exports.
Dangote, whose wealth is estimated by Forbes at $12.7bn, did not reply to several Reuters requests as of the time of filing this report. Officials of the firm have been mute to the media for some time now.
BP, Trafigura, Vitol, among others, have met Dangote in Lagos and London in recent weeks to offer loans for the some $3bn in working capital the refinery needs to buy large amounts of crude, trading sources told Reuters.
The traders asked the refinery to repay loans with fuel exports but so far, they have signed no deals as Dangote worries they would reduce his control of the project and potentially his profit, the sources said.
Dangote has also met state-backed firms in his search for cash and crude.
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