Dangote in talks with oil traders for refinery loan, denies $500m offshore facility talk with Vitol and Trafigura

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Aliko Dangote

Africa’s richest man Aliko Dangote is in talks with some of the world’s biggest oil traders to help finance his mega refinery project outside of Nigeria’s commercial centre Lagos, sources with knowledge of the matter said.

But there are strong indications that the management of Dangote Refinery is keeping close to their chest the alleged talks with Vitol and Trafigura, two major oil trading firms for a $500 million offshore facility for the completion of the 650, 000 barrel per day refinery.

“The company is not in any talks with the aforementioned oil traders to seek a loan to finance our project,” the management of Dangote Industries Ltd said in a statement.

The 650,000 barrel-per-day refinery, once complete, will be the continent’s largest plant and redraw major trade flows of crude and fuel in the Atlantic basin.

Despite being Africa’s biggest oil producer and exporter, the country depends almost entirely on fuel imports after allowing its significant refining capacity, 445,000 barrels-per-day, to become dilapidated over several decades.

Many past and current Nigerian officials, including President Muhammadu Buhari, have announced plans to refurbish them but political will has been lacking.

The Natural Resources Governance Institute, a non-profit policy think tank, has previously pointed to the moribund refineries as a key focus of oil corruption and waste in the country.

Hit by economic consequences of the COVID-19 pandemic and soaring construction costs, Dangote needs a cash injection.