This, according to six sources familiar with the matter, who 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.”
Punch Online reports that Dangote unveiled the Dangote Petroleum Refinery in Ibeju-Lekki, Lagos on May 22, 2023.
The move, according to a Reuters report on Tuesday 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 comment Reuters requests as of the time of filing this report.
BP, Trafigura and 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.
“He is going to try and do it himself,” an industry source told Reuters.
Sources told Reuters the new trading team will be led by ex-Essar trader, Radha Mohan.
Mohan 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.
Reuters report further stated that “the Lagos refinery took nearly a decade to complete and it came in at a cost of $20bn, some $6bn over budget.
“The plant has refined around 8m barrels of oil between January and February and will take months to get to full capacity.
“So far, Vitol has prepaid for some product cargoes to help the refinery buy crude, while Trafigura has swapped some crude oil in exchange for future fuel cargoes, sources with knowledge said. Geneva-based Vitol and Trafigura declined to comment.”
