Dangote Group controlled by Africa’s richest 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 $9 billion oil refinery and petrochemical complex it plans in southwest Nigeria, Group Executive Director Devakumar Edwin said in a Jan. 17 interview in Lagos, the country’s commercial capital. The company 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 Shell Plc and San Ramon, California-based Chevron Corp. are selling onshore and shallow-water fields in Nigeria amid persistent violence and crude theft in the oil-rich Niger River Delta, with smaller Nigerian companies taking their place.
Dangote Group believes it can manage unrest and 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.”
Aliko Dangote, who is co-chairman of this year’s World Economic Forum in Davos, has seen his wealth climb $1.1 billion in the month to date, making him the world’s 27th richest person with a net worth estimated at $24.9 billion, according to the Bloomberg Billionaires’ Index.
via@Bloomberg