Fuel shortages are expected to persist long after the US war with Iran due to the damage inflicted on refineries and the need to replenish stocks, the chief executive officer of Nigeria’s Dangote oil refinery told Reuters.
A Dangote crude oil tank is seen inside the Dangote Industries oil refinery and fertiliser plant site in the Ibeju-Lekki district of Lagos, Nigeria. Image credit: Reuters/Sodiq Adelakun/File Photo
Dangote plans to double its capacity to match the world’s largest refinery, Jamnagar, in India, and to build a second refinery in Kenya.
“We went in (to the Iran war) at high refinery utilisation (rates), and there’s been deferred maintenance and damage to Middle East refineries — that’s just to meet current demand,” CEO David Bird told Reuters.
“Plus inventories have to be rebuilt, plus a lot of countries are talking about supply security and increasing stocks.”
Nigeria’s Dangote refinery has emerged as a winner this year as wars involving the United States and Iran and Russia with Ukraine have damaged refining capacity and disrupted exports, creating global shortages of fuels such as gasoline and diesel.
The refinery posted a first-half after-tax profit of $1.82bn after a $476m loss for the previous full year, its IPO prospectus showed on Monday.
“We’re at full capacity, 700,000 barrels per day; we are enjoying those upswings, and yes, it has fundamentally changed the funding premise of this Vision 2030,” Bird said, referring to its expansion plan.
It aims to double capacity to 1.4 million bpd by 2029 as part of the $14.3bn expansion, Bird said.
That will include the construction of petrochemical and oil refining units that will enhance the plant’s import substitution of some petrochemical products and enable it to produce different specifications of diesel, Bird said.
The refinery’s IPO aims to raise about $1.63bn, largely targeting retail investors, and will run from 14 September to 13 October.
