Dangote expects fuel shortages beyond Iran war as it spurs expansion
SEATTLE (Oil Monster): Fuel shortages are expected to persist long after the U.S. 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.
Dangote is set to double its capacity to equal the world's largest, the Jamnagar Refinery in India, and plans a second refinery in Kenya.
"We went in (to the Iran war) at high refinery utilisation (rates), and there's been deferred maintenance and damages 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 $1.82 billion after a $476 million 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 $14.3 billion 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 2.15 trillion naira ($1.63 billion), largely targeting retail investors, and will run from September 14 to October 13.
Courtesy: www.reuters.com