Aliko Dangote now needs billions in funding to boost his $20 billion refinery near Lagos. The refinery is aiming to reduce Nigeria’s reliance on imported fuel.
Despite early production successes, challenges like currency fluctuations and issues with Nigeria’s state oil firm, NNPC, threaten his ambitious goals.
Now, Aliko Dangote, Africa’s wealthiest individual, is negotiating billions of dollars in funding to increase production at his $20 billion refinery on the outskirts of Lagos.
This ambitious project, designed to reduce Nigeria’s reliance on imported petroleum products, is capable of processing 650,000 barrels of crude oil per day when fully operational.
Dangote Seeks Funding To Boost Refinery Production And Secure Crude Supply
Currently, Dangote is in talks with commercial lenders, development banks, oil traders, and other key industry players to ensure a stable crude oil supply for the refinery.
Production began earlier this year, with the refinery already processing 420,000 barrels per day.
In September, it began producing jet fuel and naphtha, followed by petrol in October, fuelling hopes of eliminating Nigeria’s dependence on fuel imports.
However, securing a reliable crude supply has been challenging.
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Specifically, the Nigerian National Petroleum Company Limited (NNPC), expected to provide a significant portion of the crude, has faced difficulties.
As a result, Dangote has sought assurances from President Bola Tinubu and Refinery CEO of NNPC, Mele Kyari, for a consistent 365,000 barrels per day, to be paid for in Nigeria’s devalued currency, the naira.
Moreover, in addition to challenges with NNPC, Dangote is grappling with the rising cost of crude procurement and operational expenses, estimated at $2 billion every 90 days for a minimum supply of 300,000 barrels per day.
The naira’s devaluation has raised concerns among financiers, with some questioning whether the refinery will ever turn a profit.
Despite these challenges, Dangote remains determined to reshape Nigeria’s energy landscape and reduce its dependence on fuel imports.