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Photo : Bloomberg Photo By Jason Alden.
Aliko Dangote, billionaire and chief executive officer of Dangote Group, looks at a panel at the World Economic Forum in Davos, Switzerland, on January 17, 2017.
Aliko Dangote, billionaire and CEO of Dangote Group, watching at a roundtable at the World Economic Forum in Davos, Switzerland, January 17, 2017.
Photo: Bloomberg Photo By Jason Alden.
A $ 15 billion oil wager is a tough challenge for the wealthiest Africans
Aliko Dangote made a fortune in cement and food processing. Today, Africa 's richest person is embarking on a bigger challenge: a $ 15 billion investment in oil, gas and petrochemicals that could, if it succeeds, transform the Nigerian economy.
Largest oil refineries near Lagos, the commercial capital. It is also building a fertilizer plant on the same site and plans to increase the gas supply of the city, the largest in Africa. Once done, he wants to buy enough oil fields to pump a quarter of a million barrels of crude a day
The workaholic, who counts Bill Gates among his friends and is worth 12.2 billion dollars, according to the Bloomberg Billionaire Index, has little experience from any of these companies. He says his pressure on them can help end Nigeria's dependence, despite its OPEC membership status, on imported fuel and increase electricity production in a country that is undergoing cuts. constant current. consultant at CITAC based in London, which badyzes the energy sector in Africa. "Refining is a competitive and volatile industry."
Dangote executives admit that it is a daunting challenge.
"We're pushing the limits," Devakumar Edwin, executive director of the group at Dangote Industries, who has worked with the billionaire for nearly 30 years, said in a July 4 interview on the site. "People still have a hard time believing we can do it, we believe we can, we are so focused."
The refinery and the petrochemical plant are the most ambitious part of the plan. Designed to cost $ 10 billion and treat 650,000 barrels of crude oil per day, the complex will be installed an hour east of Lagos on a swampy strip of land bordered by water. Atlantic and a lagoon. About 7,000 Nigerian, Chinese, Indian and other workers are rushing to prepare it by 2020, when it is expected to sell gasoline, diesel, aviation fuel and plastics.
Dangote bought nearly 300 cranes and built a pier for ships bring equipment. One piece, a 94-meter high column used to distil crude into different products, weighs 2,310 tons, or 400 elephants.
"It's a logistical nightmare," Edwin said. "No road, no bridge can handle these things."
The refinery will produce about 50 million liters per day of gasoline, making it easy to meet the needs of the continent's most populous nation . The group has been meeting with traders, including Royal Dutch Shell, Vitol Group and Trafigura Group, about the supply of oil and the purchase of refined products, he said.
According to Bloomberg Intelligence badyst in London, Salih Yilmaz, an badyst at Bloomberg Intelligence in London, fuel imports are dropping significantly not only in Nigeria, whose decrepit refineries operate at a fraction of their capacity, but also in West Africa. "The magnitude of the refinery, and the fact that it is the first refinery in Nigeria for thirty years, will make the project difficult," said Johnny Stewart, an badyst at Wood Mackenzie, an oil and gas consulting firm. based in Edinburgh. "We expect the project will be commissioned in 2022 at a higher cost than is currently reported."
When Nigerian Oil Minister Emmanuel Ibe Kachikwu visited the site last year, he urged the company to hurry up. absolutely enthusiastic "if it was completed in time for next February's elections.
Dangote critics accuse him of having close ties to politicians and curbing imports that block foreign competitors." He admits that his businesses, including cement, may not have succeeded without some protectionism, but the refinery will not receive any government favors, including subsidized crude deliveries.
"Why would we do it?" Edwin says According to badysts, this could affect profits on domestic sales, given that Nigeria caps gasoline prices at the equivalent of $ 0.40 per liter ($ 1.51 per gallon), making it one of the world's cheapest countries According to GlobalPetrolPrices.com, the world's 10 cheapest countries to fill your tank
Most private retailers have stopped selling. impor ter, leaving the work in the hands of the public oil company, which makes a downstream loss
"The gasoline pricing scheme is a major risk," said Parker, of CITAC
L & # 2.5; fertilizer plant of $ 2.5 billion, whose completion is expected at the end of this year, aims to produce 3 million tons of urea. a year, almost enough to meet the demand of farmers across Africa. This is part of Dangote's move to agriculture, which includes investing nearly $ 5 billion in rice, sugar, and dairy products.
"Why do we still import most of our food in Nigeria?" Edwin said. "The agricultural activity will grow and the demand for fertilizer will increase."
The plant and refinery can be supplied with gas Dangote will route to the site from the Niger Delta by pipelines submarines of about 2.5 billion. Surpluses will be sold to businesses, including power plants, which will encourage oil companies to reduce flaring, according to Edwin.
"Nigeria's gas is not monetized," he said. Dangote said that there were many critics who doubted that he would succeed when he decided to start manufacturing cement and food, given Nigeria's reputation as a business environment. so hard. He says it's no different with his latest project.
"We have the strongest team that we can muster, and we have been working together for years," he said in an interview last year. "We do not want to listen to criticism, because their intention is to destroy us, we will deliver it definitively, by the grace of God."
