(Ecofin Agency) - Nigerian billionaire Aliko Dangote is planning to establish an oil trading company to manage crude supply for his new refinery in Nigeria, Reuters reported on Tuesday, March 5, 2024, citing sources familiar with the matter.

The new oil trading arm of Dangote Group, expected to be based in London, would allow Dangote to do without global trading giants like Trafigura and Vitol. These firms have been in negotiations for months to supply the mega-refinery with crude oil in return for shipments of refined products.

According to Reuters, representatives from several major international oil trading firms, including BP, Trafigura, and Vitol, have met with Dangote in Lagos and London in recent weeks. They proposed loans to provide the refinery with the $3 billion in working capital needed to purchase large quantities of crude. However, sources indicated that no deal has been signed yet, as the Nigerian billionaire fears a reduction in his control over the project and its profits.

The sources also revealed that Dangote has already selected Radha Mohan, a former trader from the Indian conglomerate Essar, to lead his upcoming trading company.

The Dangote Refinery, Africa's largest with a capacity of 650,000 barrels per day, began its export operations in mid-February, delivering its first shipment of refined petroleum products to Trafigura.