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Nigeria's Dangote expects new oil refinery to account for half of group assets

Fri 6th July, 2018 3:00pm
By Chijioke Ohuocha and Didi Akinyelure
    LAGOS, July 6 (Reuters) - An oil refinery being built by
Aliko Dangote will account for half of his conglomerate's assets
when it is finished next year, a senior executive told Reuters,
underscoring the scale of the bet being made by Africa's richest
man on Nigerian oil and gas. 
    Dangote has built his fortune on cement, although his
sprawling business empire also spans flour milling, agriculture
and real estate. Now he is building the world's largest single
oil refinery and also expanding into fertiliser, aiming to
address long-standing problems in Nigeria's energy markets.
    Though Africa's biggest crude oil producer, Nigeria imports
almost all of its gasoline due to poor maintenance of its four
state-owned refineries. Dangote hopes to meet the fuel needs of
Africa's most populous nation, where poor power supply forces
families and businesses to rely on diesel-powered generators.
    Dangote Group Executive Director Devakumar Edwin said the
$10 billion refinery should be completed by December 2019.
    "As of today, cement is the biggest (part of the group). By
2020, the refinery will be the biggest (by assets)," he told
Reuters in an interview at the site in the Lekki district of
southwestern Lagos state. 
    Dangote Cement  DANGCEM.LG , Nigeria's biggest listed
company, has attracted investment from Dubai and South African
sovereign funds. It posted a 2017 profit of 289.6 billion naira
($920.8 million), up 60 percent on 2016, and is valued at $4
billion.  urn:newsml:reuters.com:*:nFWN1R20K0
    Edwin said the oil refinery, with capacity to produce
650,000 tonnes, would also target export markets.
    "Our primary focus is Nigeria, to meet the entire local
demand, but we have the capacity to export more than 50 percent
of what we produce, so the secondary focus will be on western
Africa and central Africa," he said.
    Edwin said the company had held talks with firms including
Vitol  VITOLV.UL  and Shell  RDSa.L  over the supply of crude
and lifting of petroleum products for sale abroad.
    The Dangote refinery will be able to process different
grades of crude including shale oil. 
    The company is borrowing $3.3 billion for the project,
arranged by Standard Chartered Bank  STAN.L . The remainder will
be funded by equity and through export agencies, Edwin said.
    Dangote has also acquired two oil fields in Nigeria from
Shell to help supply the refinery. 
    Edwin said the first phase of the 1.5 million tonne capacity
fertiliser plant, on the same Lagos state site, would be
completed in September and start operating in December. The
second line, also 1.5 million tonnes, will start four months
later, he added. 
    The refinery and petrochemical complex located on 25,000
hectares of swampy land includes a jetty to ferry products by
sea within Nigeria and abroad and an undersea pipeline to
transport gas.
    Dangote will consider listing the oil refinery once it comes
onstream, Edwin added.
    He said that would follow a planned listing of the cement
company in London next year after elections in Nigeria. That
listing has been mooted for a number of years. 
    Plans have been delayed to enable the company to meet
requirements for the listing, which Edwin said had been
completed. He said the listing could help it fund acquisitions
overseas.
    ($1 = 314.50 naira)

 (Writing by Chijioke Ohuocha; Editing by Alexis Akwagyiram and
Mark Potter)
 ((chijioke.ohuocha@thomsonreuters.com; +234 703 4180 621;
Reuters Messaging: chijioke.ohuocha.thomsonreuters@reuters.net))
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