Business
Dangote considers buying Nigeria’s oil fields
Aliko Dangote, Founder, President and Chief Executive of the Dangote Group. PHOTO/File
The Dangote Group, funded and run by the world’s richest black man, Aliko Dangote, is considering the purchase of Nigerian oil fields as international companies plan to sell onshore assets in the continent’s top crude producer.
The company, which has interests from cement to sugar, needs to secure a supply of crude oil and a “substantial amount of gas” for a US$9 billion oil refinery and petrochemical complex it plans in southwest Nigeria, according to the Group’s Executive Director Devakumar Edwin in an interview in Lagos, Nigeria’s commercial capital. The Dangote Group also needs energy for its cement plants in Africa’s second-largest economy, he said.
“We’re seriously thinking of investing in oil blocks both for gas and for oil,” Edwin said. “We’ve started talking with some companies who are divesting from onshore,” he said, declining to name them.
International oil and gas explorers including Royal Dutch Shell Plc., and San Ramon, California-based Chevron Corporation are selling onshore and shallow-water fields in Nigeria, with smaller Nigerian companies taking their place.
Dangote “will require feed stock for the refinery,” Pabina Yinkere, the head of research at Lagos-based Vetiva Capital Management Ltd., said by e-mail. With its “aspirations of becoming a global cement name, and the importance of energy in the cement production process, this could serve as a complement in the long run.”
The Dangote Group believes it can manage the aggrieved communities in the region with corporate social initiatives, Edwin said.
“We know the terrain much better, we know the risks and we believe that the risks can be managed,” he said. “The primary risk is people blasting your pipelines. I wouldn’t like to go and invest in a block which is totally inland and then I have to start buying inland pipelines.”
