Dangote Refinery Is On Track To Become The Fifth Largest Company In Africa
Africa's richest man, Aliko Dangote, established and chaired Dangote Cement, the continent's
largest cement company. He was born in Kano, Kano State, Nigeria. Through a holding company,
he owns 85 percent of Dangote Cement, which is publicly listed. Dangote Cement manufactures
45.6 million metric tons of cement per year and has operations in ten African nations.
Dangote also has holdings in publicly listed salt and sugar industries. As a result, Mr
Dangote's entry into the oil refinery industry should come as no surprise.
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Africa is endowed with a plethora of natural resources, including arable land, water, oil,
natural gas, minerals, forests, and animals. The continent is home to a significant percentage
of the world's natural resources, both renewable and nonrenewable.
Africa is home to 30% of the world's mineral reserves, 8% of the world's natural gas reserves,
and 12% of the world's oil reserves. The continent has 40% of the world's gold and up to 90%
of its chromium and platinum reserves. Africa has the world's biggest reserves of cobalt,
diamonds, platinum, and uranium. It has 65% of the world's arable land and 10% of the
planet's internal renewable fresh water source. Africa has 4 Countries which are amongst the
15 largest Oil reserves in the World and Nigeria is Africa's greatest producer of oil and gas.
Crude oil from the Niger delta region is classified as light or comparably heavy - the lighter
being approximately 36 gravity and the heavier being 20–25 gravity. Both are paraffinic
and sulfur-free. Since 1960, Nigeria's economy and budget have been mainly sustained by income
and revenues generated by the petroleum sector. According to statistics as of February 2021,
Nigeria's oil sector accounts for around 9% of the country's total GDP. Nigeria, Africa's
largest oil and gas producer, is a major exporter of crude oil and petroleum products to the
United States. Nigeria shipped approximately one million barrels per day to the United
States of America in 2010, accounting for 9% of total US crude oil and petroleum product
imports and more than 40% of Nigeria exports. On July 18th, 2008, the Goodluck Jonathan
government introduced the Petroleum Sector Bill in response to the need for holistic
changes in the petroleum industry, ease of doing business, and development of local content
in the industry. Oil and gas exports contributed for more than 98 percent of export profits
and about 83 percent of federal government income in 2000, as well as more than 14 percent
of GDP. It also accounts for 95 percent of foreign exchange profits and around 65 percent
of government budgetary income.
The United States Energy Information Administration (EIA) estimates Nigeria's known oil reserves
to be between 16 and 22 billion barrels, although other sources suggest there might be as much
as 35.3 billion barrels. Nigeria is the tenth most petroleum-rich country in the world,
and by far the most prosperous in Africa, because to its reserves. Its crude oil output
averaged approximately 2,200,000 barrels per day in mid-2001. Based on an average benchmark
oil price of $85-$90 per barrel, the sector is anticipated to remain profitable. Mr Aliko
Dangote must surely be aware of all these before venturing into Petroleum business.
The Dangote refinery, which is being built in Lekki, Lagos State, is on track to become
Africa's largest oil refinery and the world's largest single train facility. In September
2013, Nigerian business Magnate Aliko Dangote revealed Plans for the refinery, announcing
that he had secured $3.3 billion in finance for the project. At the time, the refinery
was expected to cost around $9 billion, with the Dangote Group investing $3 billion and
commercial loans covering the rest, with production beginning in 2016. However, due to a shift
in site to Lekki, building of the refinery did not commence until 2016, with excavation
and infrastructural preparation, and completion was pushed back to late 2018. The refinery's
major structural construction began in July 2017, and Dangote expected it to be mechanically
complete in late 2019 and operating in early 2020. According to Reuters, which cited anonymous
sources familiar with the project, construction was likely to take at least twice as long
as Dangote had previously stated, with partial refining capability not expected until 2022
at the earliest. According to current estimates, the project
will Now cost $15 billion in total, with $10 billion going toward the refinery, $2.5 billion
going toward the fertilizer factory, and $2.5 billion going toward pipeline infrastructure.
Mr Aliko Dangote is said to have already invested more than $7 billion, which is somewhat more
than 60% of his entire net wealth, which Forbes estimates at $11.6 billion.
The refinery will be Africa's largest, generating 650,000 barrels of crude oil per day which
will be transported by pipelines from oil sources in the Niger Delta, where natural
gas will be acquired to fuel the fertilizer plant and to generate electricity for the
refinery complex. When fully operational, the facility will have the capacity to produce
50,000,000 litres (13,000,000 US gal) of gasoline and 17,000,000 litres (4,500,000 US gal) of
diesel per day, in addition to aviation fuel and plastic products.
The Dangote refinery's output capacity somewhat exceeds that of large oil refineries such
as Aramco's Ras Tanura plant, the country's largest refinery with a production capacity
of 550,000 barrels per day. The Dangote refinery will be rated second in the United Arab Emirates,
after the Abu Dhabi oil refining company's Ruwais refinery. In Iran, the Dangote refinery
will outperform the country's largest refinery, the Abadan refinery, which has a capacity
of 450,000 barrels per day. The refinery also outperforms large European
refineries operated by well-known oil corporations such as ExxonMobil, OMV, Royal Dutch Shell,
Total SA, and Vitol, but is surpassed by Russia's JSC Antipinskiy refinery, which has a capacity
of 896,500 barrels per day. Dangote's refinery appears to be fairly formidable
in Northern and Central American nations as well, with its output pulling weight in states
such as Texas. The popular Valero Port Arthur refinery in Texas, owned by Motiva Enterprises,
an American affiliate of Saudi Aramco, remains the closest to Dangote's refinery, with a
daily capacity of 636,500 barrels. The Paraguaná Refinery Complex in Venezuela,
which is the largest in South America and the third largest in the world, dwarfs Dangote's
by a wide margin; nevertheless, the Nigerian refinery would rank second in the province.
Back in West Africa, Dangote's refinery accounts for over half of the stock market capitalization
of the Nigerian Stock Exchange, accounting for around 48 percent of the value. The refinery
dwarfs all equities valued more than a trillion dollars, including MTN, Airtel Nigeria, BUA
cement, and Nestle Nigeria. Mr. Dangote's refinery accounts for 72 percent of the entire
value of the stocks valued more than a trillion dollars.
When compared to Nigeria's top tier banks, such as First Bank of Nigeria, Zenith Bank,
Access Bank, and United Bank of Africa, Dangote's refinery outperforms their total market value
by 389 percent. Dangote Refinery will be Africa's fifth largest corporation, dethroning Anglo
American Platinum, the world's largest primary producer of platinum. The company's output
accounts for about 38% of the world's yearly supply and is presently valued at $13 billion.
The refinery's efforts in the oil and gas business are reflected in its remarkable global
ranking of number 30, surpassing an Austrian multinational integrated oil, gas, and petrochemical
firm OMV. The refinery is doing well in America, competing with the likes of Domino's Pizza,
which has a net worth of $18.1 billion, United Airlines, which has a net worth of $16.9 billion,
GameStop, which has a net worth of $15 billion, American Airlines, which has a net worth of
over $13.6 billion, McAfee, which has a net worth of $12 billion, and Western Union, which
has a net worth of $9.4 billion. Dangote refinery will be rated 34th in the
United Kingdom, outperforming establishments such as EasyJet, which is now valued at $5.9
billion, and ninth in Saudi Arabia, outperforming Saudi British Bank, which is currently valued
at $17.2 billion. When completed, the Dangote refinery would
be Africa's biggest refinery, the continent's fifth largest corporation by market value,
and the world's largest single train refinery, elevating Nigeria's position in the global
crude oil refining industry. If you enjoyed this video, and you will like
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