Africa's richest man, Aliko Dangote, says he plans to list his $20bn Dangote Petroleum Refinery on the Nigerian Exchange Limited, an announcement that has created a buzz in the business community.
The plan will be a major boon for the management of the exchange who have been intensifying efforts in recent times to deepen the market by encouraging listings.
The Kano State born businessman, in an interview with Financial Times said that with the resolution of challenges with crude oil supply to the refinery, “We are now ready to move forward with our plans to list the refinery on the Nigerian Exchange Limited.”
The businessman revealed that the refinery which is expected to produce diesel, kerosene and jet fuel, could start operations in December, months after it was officially opened by former president, Muhammadu Buhari in May.
“We’re starting with 350,000 barrels a day,” Dangote told the Financial Times, adding that a deal had already been clinched for the “first cargo of about 6mn barrels” for delivery next month.
Dangote has some companies listed on the NGX already like Dangote Cement, Dangote Sugar Refinery and Nascon Allied Industries. The last two firms are in the middle of a merger with Dangote Rice firm.
The merger is expected to result in a major food company to rival BUA Foods owned by another billionaire businessman, Abdul Samad Rabiu, who is also one of top players in the cement industry, BUA Cement.
Meanwhile, Dangote confirmed in the interview that the refinery will commence operations in December.
He said the long-awaited refinery is starting with 350,000 barrels a day, while also confirming that a deal had already been clinched for the first cargo of about 6 million barrels of crude for delivery in December 2023.
“We are starting with 350,000 barrels a day. I don’t know whether other people can face our challenges and even survive. It is either we sink or we sail through. And we thank the Almighty that we have arrived at the destination,” he said.
Recall that the Nigerian National Petroleum Company Limited (NNPCL) on Novmeber 2, 2023 said it will supply 6 million barrels of crude oil totalling 200,000 barrels of oil per day to the Dangote refinery next month as part of a one-year supply agreement.
In his interview with the Financial Times, Dangote shared that he held a strong belief in the refinery’s capability to achieve its maximum output of 650,000 barrels per day by the end of 2024.
Emphasizing that the company had successfully resolved all challenges related to crude oil supply, he disclosed plans for the Dangote refinery to eventually become an independent entity listed on the Lagos Stock Exchange.
Expanding on the refinery project, Dangote expressed that this kind of project won’t emerge in Nigeria within the next twenty years.
He also said the company did not cut corners or seek applause, but the project was done for the sake of posterity.
During the FT interview, Dangote dismissed the idea that the Nigerian National Petroleum Corporation (NNPC) was pushing for a larger stake in the refinery project. He mentioned that once fully operational, the refinery is estimated to generate a substantial annual revenue of $25 billion. Dangote expressed confidence that NNPC is content with the shares already allocated to them in the project.
Former President Muhammadu Buhari commissioned the 650,000 barrels per day capacity refinery at the Lekki free trade zone area of the commercial hub Lagos on May 22, 2023.
Leave a Reply