The $20bn Dangote Oil Refinery will attain 500,000 barrels daily capacity by the end of July and its full capacity of 650,000 barrels towards the end of the year.
According to him, the US oil is not being imported to take over that of Nigeria, saying 24 million barrels coming from the US is just two cargoes per month, which represents 10 per cent of the refinery’s demand at full capacity.
“As you know, we are ramping up and I think by July or thereabouts, we will be talking of about over 500,000 barrels per day refining capacity, which is huge. And then, by sometime towards the end of the year, we believe that we will hit our capacity of 650,000 barrels per day. So, it is a very huge capacity.
“The US one (crude oil) is not something that will come and take over Nigeria something. It is not very small. When we say 24 million barrels, it sounds huge, but it is not huge. It is roughly about two cargoes in a month, which is about 10 per cent of our demand at full capacity,” Dangote stated.
The refinery will also be listed on the Nigerian Stock Exchange by December 2024.
The Chairman of the Dangote Group, Aliko Dangote, maintained that as a new business, he would love to have Nigerians, Africans and other investors as shareholders in the refinery, stressing that he wants to allow them to join in making what he called a historic move.
The African richest man made this disclosure while speaking with the Africa Report.
“The listing, most likely, I won’t be surprised if we list (on the Nigerian Stock Exchange) by the end of this year. We will do that. You know it is new and I think we would like to allow Nigerians, Africans, and other investors to join in making this historic move,” he submitted.
An economy and capital market analyst, Rotimi Fakayejo, said the listing of the refinery would attract about N8tn market capitalisation on the Nigerian Stock Exchange.
According to him, the refinery being listed would attract foreign portfolio investment to the country, giving the economy more foreign exchange.
“The listing of any company is to distribute wealth and when individuals and corporate organisations buy into a company that is perceived to do well in the present and the future, then it increases the economic wealth and the well-being of the country,” Fakayejo stated.
The expert opined that the refinery is going to add depth to the equity market in terms of quality and quantity.
“It is also going to engender foreign portfolio investment. Such listing will affect individuals in the country and the stocks listed on the Nigerian exchange.
“Making mention of how it will affect foreign portfolio investment, it is going to attract foreign exchange and that also will boost the economy. I think the coming of the Dangote refinery is going to add so much value to the various sectors, and I think it is long overdue,” he added.
Fakayejo explained, “With the Dangote refinery coming, at least it will add a minimum of about N8tn to N10tn to the market capitalisation. That implies that we are going to see the market capitalisation running to about 40 to N45tn after the listing.
“When you look at the value invested in the company, when you look at their balance sheet at the time they will come to the floor, their balance sheet will be more than N15tn. And definitely, the market cap of that company will be much more than the balance sheet. So, I’m just being conservative by saying it will add N10tn to the market capitalisation. It is going to be a win-win”.
Similarly, the Vice President of Highcap Securities Limited, David Adonri, said stakeholders were patiently awaiting the listing of the Dangote refinery on the stock market.
Adonri mentioned that the listing would give Nigerians the opportunity to share in the enormous wealth the refinery would create.
“It is a major development for the Nigerian capital market. It will be a momentous event for the capital market because of the share size of that refinery and the depth it will bring to the Nigerian equity stock market. It is a very big activity for the capital market,” Adonri remarked.
The analyst told our correspondent that he would not be able to quantify the value the listing would add at the moment until the company announces the number of shares to list and the price, saying only these would give an idea of what the market capitalisation would be.
He enunciated that the Dangote refinery has a bright prospect looking into the future.
“This is the right time for the Dangote refinery to come to the market to be listed. The company is on course. It is in production and its sales are going on. The demand for its product is much higher than what it can produce. So, there is a huge supply gap the company is planning to fill, that therefore means that the prospect of the company in the future is very bright.
The Dangote Group Chairman also disclosed that the refinery resorted to importing crude oil from the United States because Nigeria’s oil production figures keep fluctuating.
Dangote said the refinery could not wait for the Nigerian crude because the production goes up and down.
Dangote’s confirmation is coming at a time when the Minister of State for Petroleum (Oil), Heineken Lokpobiri, denied knowledge of Dangote refinery importing crude from the US.
It was earlier reported that the 650,000 barrels capacity refinery had agreed to import 24 million barrels of crude oil from the United States in the coming months.
The company had put out a tender for 2 million barrels of West Texas Intermediate Midland crude every month for a year, starting in July. This was due to the inability of the refinery to source feedstock locally as Nigeria battles low crude production and oil theft.
But while answering questions during a sectoral ministerial briefing last week, Lokpobiri, said the country is blessed with enough crude to supply to all the refineries in the country, including the modular ones, saying he was not aware Dangote was importing crude from America.
“I’m not aware that Dangote Refinery has started importing crude oil from the US. That’s the reason why we’re talking about an increase in production.
“That’s why we’re talking to servicing companies to come back and start drilling. The only way we can increase production is to continue drilling,” Lokpobiri stated.
However, Dangote, in the interview, noted that it made economic sense to get crude elsewhere as the refinery ramps up production in the coming months.
“We have tendered to buy some WTI oil from the US because the size of our refinery is very big and we have to make sure that we secure the raw materials for our production. If we have 100 per cent Nigerian crude, fine, but we can’t wait because sometimes the production is up and down.
“But I think it makes economic sense for us to include the WTI in the basket of crudes that we are buying. And that is the reason why we went out on a tender,” the business giant stated.
