Aliko Dangote, Africa’s richest man, is seeking to establish an oil trading arm, most likely located in London.
The aim is to help manage crude and product supplies for his planned refinery in Nigeria, according to six people familiar with the situation.
The decision would decrease the influence of the world’s largest trading corporations, who have been negotiating for months to provide the refinery with money and crude oil in return for product exports.
The massive 650,000 barrel-per-day refinery is poised to reshape global oil and gasoline flows, and the trading industry is eagerly watching how it will work.
Dangote, whose net worth is estimated by Forbes at $12.7 billion, did not respond to many response requests.
BP, Trafigura, and Vitol, among others, have met with Dangote in Lagos and London in recent weeks to provide loans for the refinery’s estimated $3 billion in working capital required to purchase big volumes of petroleum, according to trading sources.
The traders wanted the refinery to repay debts with gasoline exports, but no deals have been made because Dangote is concerned that doing so would decrease his control of the business—and perhaps his profit, according to sources. Dangote has also engaged with state-owned companies in his pursuit of cash and crude.
“He is going to try and do it himself,” an industry insider told Reuters. According to Reuters, the new trading team will be managed by Radha Mohan, a former Essar trader. According to his LinkedIn page, he began working with Dangote in 2021 as director of international supply and trading.
Two sources stated that the team was in the process of hiring two new traders. The refinery took nearly a decade to build and cost $20 billion, $6 billion more than expected.
The factory processed around 8 million barrels of oil between January and February and will take months to reach full capacity. Vitol has already pre-paid for certain product shipments to assist the refinery in purchasing crude, while Trafigura has swapped some crude oil for future gasoline cargoes, according to sources. Vitol and Trafigura, both located in Geneva, declined to comment.
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