Nigeria-based multinational conglomerate Dangote Industries Limited has refuted claims that it is in talks with internationally renowned oil traders to secure a loan for its mega-refinery project.
Reuters reported Dangote Industries management as saying that “the company is not in any talks with the aforementioned oil traders to seek a loan to finance our project.”
However, the report cited anonymous sources as stating that the company is, in fact, in talks with leading oil traders. According to the report, two sources with direct knowledge of the matter said that the option of raising $500 million from a trade house or consortium is being explored.
The details of the potential loan have not yet been released, but the oil trader could receive a long-term contract to supply crude and receive refined cargo as repayment.
The refinery’s completion was initially slated for 2016. With the refinery projected to commence operations in 2025, the company’s indebtedness to lenders is estimated to hit $8.4 billion by 2025. The longer it delays the launch of the refinery, the more indebted the company will become.
The Dangote Oil Refinery is a 650,000-barrel-per-day integrated refinery and petrochemical project under construction in the Lekki Free Zone near Lagos.
The mega-facility is privately held by Africa’s wealthiest man Aliko Dangote.
In August, Nigeria’s Federal Executive Council approved $2.76 billion for the state oil company, the Nigerian National Petroleum Corporation, to acquire a 20-percent stake in the refinery.
The government said that it will supply the refinery with 300,000 barrels per day of crude oil when production fully commences.
