Africa's richest man spending big to keep oil at home

Nigeria is one of the world's biggest oil producers. But where does it get what little finished petroleum products it can? From abroad. Enter homegrown billionaire and cement magnate Aliko Dangote.

Nigeria is one of the world's biggest oil producers. So where does it get what little gasoline, diesel and other finished petroleum products it can? 

From abroad of course. Despite ranking 7th in output among OPEC countries, and 13th in the world by some measures, Africa's most populous country is bereft of decent refineries. So off the oil goes to foreign shores, not to mention into the hands of thieves who siphon off as much as 400,000 barrels a day from pipelines (that's a lot - as much as 20 percent of official production). Back it comes- only a bit of it that is  - whipped up into fuel or whatever. Yes, you can sell coal to Newcastle. Ice to Eskimos.

Aliko Dangote, a homegrown billionaire and the continent's richest man, wants to change all that.

The 56-year-old Nigerian cement and sugar magnate recently forged a $9 billion plan to build a private refinery in hopes of reversing the crumbling state of the country's refining operations, currently controlled by the government, the Wall Street Journal reported.

It's an audacious scheme. He'll need government approval in a land riddled with corruption. And then there are those bandits, including violent gangs prone to blowing up infrastructure. Throw in sectarian strife and the militant Boko Haram movement, and you've redefined the term "challenging business environment."

But Dangote looks determined. Today, news broke that he now wants to buy Nigerian oil fields from Royal Dutch Shell and Chevron, both of which are looking to sell because, it seems, they've had enough of those pipeline saboteurs, BloombergBusinessweek reported.

Dangote could then send the oil straight to his would-be refinery, which if he were to build it would 
"cut fuel imports for the country in half, according to the company," Bloomberg noted.

It seems he would use a fair amount of the fossil fuels himself to power cement making processes - a high temperature, energy intensive operation.  (Note to Mr. Dangote: Why not try out a small high- temperature nuclear reactor as a heat source for your cement factories ?). Nigeria today wastes a lot gas by flaring it off of oil wells rather than capturing it; perhaps Dangote could rectify that shortcoming.

He also plans to make fertilizer and petrochemicals on a complex that would include the refinery, Bloomberg said.

Dangote is an ambitious global businessman eyeing expansion that includes cement in South America. He is a driving force in turning his home country of 175 million people into what will soon be Africa's largest economy.

This week, he and Nigerian president Goodluck Jonathan are scheduled to attend the World Economic Forum in Davos, Switzerland, the annual gathering of global business and political leaders. Dangote is this year's co-chair. He'll probably find the alpine setting a bit calmer than the action when he returns to Lagos.

Good luck, Aliko.

Cover photo is from World Economic Forum/Matthew Jordaan via Wikimedia

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