Connect with us

News

Dangote seeks billions to boost crude supplies at new Nigerian refinery

Published

on

Dangote seeks billions to boost crude supplies at new Nigerian refinery

Stay informed with free updates

Nigerian business tycoon Aliko Dangote is seeking to raise billions of dollars to step up production at his $20bn oil refinery on the outskirts of Lagos.

The industrialist is in talks with commercial lenders, development banks, oil traders and other industry participants to raise funds for crude supplies to turn into refined products, according to people familiar with the matter.

His company Dangote Industries has bought crude from the US and Brazil, and in July was in talks with African suppliers such as Libya and Angola, according to Devakumar Edwin, a senior executive at the group.

Advertisement

Africa’s richest man needs to secure more crude to reach the refinery’s capacity of 650,000 barrels per day for a project he has said is a “game changer” for the country.

The billionaire told the Financial Times last month that he expected the refinery to be at capacity by the second quarter of next year, although previous targets have often slipped.

Dangote added that Nigeria’s biggest infrastructure project in decades and the largest of its kind in the world is already producing 420,000 b/d.

He wants to resolve what he describes as an “absurd” situation in which Africa’s biggest oil producer imported all of its refined petroleum products because of a lack of refining capacity.

The plant began producing jet fuel and naphtha at the start of the year and petrol in September, raising hopes that Nigeria could finally end decades of reliance on imported fuel.

Advertisement

It would cost about $2bn every 90 days to secure a minimum supply of 300,000 b/d, people familiar with the matter say.

Investors have expressed frustration at Dangote’s inability to gain a steady supply of crude, according to one banker involved in the fundraising. Another added that there was also a major concern among potential financiers over exposure to Nigeria’s currency, the naira, which has fallen sharply following two devaluations over the past year.

“The refinery may never make a profit in real terms,” said the second banker. “It was built over-budget and the naira, which is a major currency of future revenue, has devalued massively.”

Dangote last month attended an emergency meeting with President Bola Tinubu and Mele Kyari, head of Nigeria’s state oil company NNPC, to talk about crude supplies.

The billionaire told the FT the meeting was to discuss “the modalities” by which NNPC would supply 365,000 b/d of crude to his plant to be paid for in naira.

Advertisement

Dangote Industries declined to comment further on the fundraising or the industrialist’s talks with the president.

NNPC did not respond to requests for comment on the fundraising or meeting.

NNPC has a 7.2 per cent stake in the refinery, which was watered down from 20 per cent after it failed to pay the balance of a deal worth $2.7bn. NNPC paid $1bn upfront in cash in 2021 and the other $1.76bn was supposed to be paid for in crude supplies. 

Many, including Dangote, have questioned NNPC’s ability to supply the crude the refinery needs because it has sold significant quantities of oil on forward contracts.

Even if NNPC comes through with the crude, Dangote would need another 185,000 b/d, or more than 5mn barrels a month, to meet his target of 550,000 b/d by January and more still once the refinery reaches full capacity. 

Advertisement

The Africa Finance Corporation, a pan-African development lender based in Nigeria that is already an investor in the project, is one of the institutions involved in the talks to raise money.

The AFC led a financing round in December for funds to source the initial capital to get the refinery up and running as a commercial operation.

The AFC declined to comment on the discussions over fundraising.

Dangote plans to use the refinery to meet the country’s entire petrol demand, which he estimates at 30mn-35mn litres a day. Some critics have accused him of seeking to replicate a quasi-monopoly he already enjoys in cement.

Refineries make money on the spread or difference between the price of crude and the money they make on the refined products they produce.

Advertisement
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

News

Los Angeles Geared Up for Fire Risk, but Fell Short

Published

on

Los Angeles Geared Up for Fire Risk, but Fell Short

Follow continuing coverage of the wildfires in Southern California.

The alert came in blaring, hot-pink, all-caps: Be prepared for a “LIFE THREATENING & DESTRUCTIVE WINDSTORM!!!”

The notice on Monday was one in a series of warnings issued by the National Weather Service about the powerful Santa Ana winds that were about to blow through Southern California, which hadn’t seen serious rain in months.

Officials in Los Angeles, a city that is accustomed to treacherous fire conditions, turned to a well-worn playbook. The city predeployed nine trucks in vulnerable areas and called in 90 extra firefighters. The county fire department moved 30 extra engines into the field and called up 100 off-duty firefighters. The U.S. Forest Service brought in trucks and support units, as well as bulldozers, helicopters and planes.

But by Tuesday afternoon, five hours after a fire ignited high in a canyon in the oceanside Pacific Palisades neighborhood, it was clear their preparations would not be enough. As furious wind gusts approaching 100 miles per hour tore through the city and propelled showers of embers that ignited entire neighborhoods, Anthony Marrone, the chief of the Los Angeles County Fire Department, stood at a command post on the edge of the Pacific Ocean.

Advertisement

Blasted by dust and dirt kicked up by the relentless wind, he snapped a picture with his phone of smoke obscuring the sun and looked out at a panorama of flames, smoke and debris. The fire, he thought to himself, looked unstoppable. It was moving “like a funnel, like a speedway,” he said. “I knew that if we had one start, we probably weren’t going to be able to contain it.”

The conflagrations that killed at least 11 people and destroyed thousands of homes have raised questions about whether the dozens of federal, state, county and city fire departments involved in this week’s fire response deployed enough resources — and the extent to which modern firefighting tools are effective against the megafires that have become increasingly common in California over the past decade.

It was only hours before a situation that bore no resemblance to an ordinary red-flag alert, the kind set off when the Santa Ana winds blow in over the Mojave Desert from the inland West, began to evolve. A second huge fire broke out in Altadena, the unincorporated area adjacent to Pasadena, destroying more than 5,000 structures. A third ignited in Sylmar, to the north, and yet another, the next day, in the Hollywood Hills.

Chief Marrone quickly acknowledged that the 9,000 firefighters in the region were not enough to stay ahead of the fires.

“We’re doing the very best we can, but no, we don’t have enough fire personnel,” he said at a news briefing on Wednesday afternoon. “The L.A. County Fire Department was prepared for one or two major brush fires, but not four.”

Advertisement

The hurricane-force winds, low humidity and parched landscape created unusually perilous conditions: On the first day, when the Palisades and Eaton fires broke out, it was too windy by late afternoon to send up the aircraft whose drops of water and fire retardant might have helped slow the spread of the blazes.

Chief Marrone said the parched terrain and the concentration of homes, surrounded by forested hillsides, also combined to create an indefensible landscape.

“The next time I’m not going to do anything differently because I don’t feel that I did anything wrong this time,” he said in an interview.

Los Angeles city fire officials had a similar view. “The fire chief did everything she could with the resources she had,” Patrick Leonard, a battalion chief with the Los Angeles Fire Department, said, referring to the city’s fire chief, Kristin Crowley.

The question of resources will almost certainly arise in the weeks ahead as the fire response is analyzed. The Los Angeles Fire Department has said for years it is dangerously underfunded. A memo sent to city leaders in December by Chief Crowley complained that recent budget cuts had “severely limited the department’s capacity to prepare for, train for, and respond to large-scale emergencies, including wildfires.”

Advertisement

But there are a host of other factors at play. Fire experts have long warned that climate change and more home-building outside of urban areas are straining firefighters’ ability to prevent and contain fires. As fires have grown in size and complexity, California has explored mitigation through thinning brush out of forests, safer power grids and shoring up home protection. But it has been far from enough, they say.

The fires in Los Angeles have also raised the critical question of how departments can battle so many powerful infernos at once. After the Woolsey fire burned more than 1,600 structures in the northern part of the county in 2018 — at the same time that other major fires were raging across the state — Los Angeles County commissioned an assessment that found that the simultaneous outbreaks had slowed the ability of other fire agencies to fight the blaze because they were already busy.

Lori Moore-Merrell, the head of the U.S. Fire Administration, a division of the Federal Emergency Management Agency, who flew this week to Los Angeles to inspect the firefighting efforts and damage, said she believed that the reason for the widespread devastation was not the firefighting response.

“They deployed enough,” Dr. Moore-Merrell said in an interview. “This fire was so intense. There isn’t a fire department in the world that could have gotten in front of this.”

The question of predeployment will almost certainly prove one of the keys to understanding the response.

Advertisement

It nearly always involves weighing a host of unknown factors. Firefighting experts agree that having engines and firefighters very close to the site of an outbreak is essential, especially in very windy conditions; fires in those cases must be stamped out immediately, or they will very likely begin to spread out of control.

“Once a wind-driven fire is well established you’re not going to put it out,” said Patrick Butler, a former assistant chief of the Los Angeles Fire Department who ran the response to many of the major fires the city has faced over the past decade.

With the threat of highly destructive fires increasing, he said, fire authorities should “flood” fire-prone areas with extra fire engines and crews during times of high winds.

But such predeployments are enormously costly, and fire chiefs often have a tough task convincing political leaders to repeatedly spend the money on them — especially when no fires break out.

Chief Butler, who now runs the fire department in Redondo Beach, Calif., said he prepositioned firefighters on a large scale at least 30 times during heightened fire threats. Fires broke out after those threats just three times, but to him, it was worth the cost.

Advertisement

“I’m not in the business of making decisions that are politically palatable,” he said.

Chief Marrone began preparing for his own predeployments after meteorologists at the National Weather Service, on the first weekend of the new year, issued a bulletin warning of a “Particularly Dangerous Situation” — code words for a severe weather warning, the kind the federal government issues only about two dozen times a year. Based on the conditions in Los Angeles, it was clear that fire would almost certainly ensue.

The chief authorized overtime and supplemental state funding to add 100 people for duty drawn from a pool of around 2,000 off-duty firefighters so they could have more units prepositioned in areas known to be vulnerable to fire, including Santa Clarita and the Santa Monica mountains.

He prepositioned four strike teams, each with five trucks, and asked the California Department of Forestry and Fire Protection, the state fire agency known as Cal Fire, to preposition two more teams. The staffing was typical for a red-flag wind event, he said. Early on Tuesday morning, the chief ordered that 900 firefighters who were finishing their shifts stay on the job. The decision increased the number of county firefighters on duty to 1,800.

And the U.S. Forest Service, which fights fires in national forests, also began mobilizing. Adrienne Freeman, an agency spokeswoman, said that on Monday, the day before the winds kicked up and the first fires started, the agency had 30 trucks from out of state and Northern California in place at four Southern California forests and at a local coordination center. On Monday night, the agency called in 50 more trucks that arrived on Tuesday, she said.

Advertisement

The city fire department proceeded with prepositioning the nine fire trucks it was deploying on Tuesday morning, according to an internal document reviewed by The New York Times, three each in Hollywood, Sunland Valley — in the northwestern part of the city — and near the city of Calabasas in the western foothills. The extra 90 firefighters the city was predeploying were called up on overtime. No extra trucks were sent to Pacific Palisades.

Those extra firefighters the city of Los Angeles called on made up less than a tenth of the approximately 1,000 on duty on any given day. And the 100 additional people called up by the county added to its daily firefighting force of 900.

Mr. Leonard, the city battalion chief, said the trucks were positioned based on historical patterns of fire during high-wind events.

“Predicting where the fire is going to start is a scientific guess,” he said.

Then the wind started, and the first embers started flying.

Advertisement

Chief Crowley, with the city department, texted the chiefs in the counties surrounding Los Angeles at 10:35 a.m. Tuesday, five minutes after the Palisades fire was first reported, notifying them, according to an account of the messages shared with The Times.

Chief Marrone responded immediately. “What do you need?” he texted.

The Ventura County chief said he was sending strike teams. “They’re on the road now,” he wrote.

Orange County’s chief said he could provide three strike teams of five trucks each, along with a helicopter and a crew that uses hand tools to cut firebreaks.

The Los Angeles Fire Department put out a call for off-duty members to come to their stations and scoured mechanic yards for vehicles.

Advertisement

Tens of thousands of people were being evacuated out of Pacific Palisades as the fire spread out of the foothills, leaping across the four lanes of Pacific Coast Highway and wiping out restaurants and homes along the coast.

Then, at 6:18 p.m. on Tuesday, came more stunning news: the second major fire, in Altadena, had ignited.

Chief Marrone put Eaton Canyon, the site of the new fire, into a navigation app and set off from the Palisades. Stuck in bumper-to-bumper freeway traffic, he could see the fresh fire and its smoke swelling into the sky.

Around 9 p.m., he called Brian Marshall, the chief of fire and rescue for the California Office of Emergency Services.

“I said, ‘We are out of resources, we need help,’” Chief Marrone said. He requested 50 strike teams, a total of 250 fire engines and 1,000 firefighters.

Advertisement

At 10:29 p.m., a third major fire ignited in Sylmar, in the northernmost part of the San Fernando Valley, about 25 miles northwest of downtown Los Angeles, and a fourth broke out near Santa Clarita on Wednesday afternoon.

Mutual aid teams from across the West, and beyond, began streaming toward Los Angeles.

Firefighters tried and failed to stay ahead of the furious flames.

“Resources were scarce” during the initial hours of the blazes, said Capt. Jason Rolston of the Orange County Fire Authority, who was among those who traveled to join the firefighting effort in Los Angeles. “There were too many houses to protect, and not enough fire engines.”

The wind was gusting so powerfully that smoke boiled across the terrain. Firefighters said the barrage of ash and soot was so overwhelming at times that they struggled to even move through the fire zone.

Advertisement

“There would be times when you couldn’t see 10 feet in front of the rig,” said Capt. Shawn Stacy, another Orange County firefighter who deployed to the Palisades fire. “What went wrong is that you had 80-m.p.h. winds.”

Some firefighters said there was so much demand on water systems that they ran out of water.

Capt. Ryan Brumback of the Los Angeles County Fire Department said he was five hours into an all-out effort to save buildings in Altadena from the Eaton fire early Wednesday morning when the hydrants started running dry — a situation firefighters also faced in the Palisades.

Suddenly, he said, “we noticed our hoses became very limp and soft.” The problem, he said, was that a power shut-off intended to prevent additional ignitions also shut off the pumps that help with water pressure in Altadena. “It was devastating, because you want to do all that you can do.”

By Friday, both initial major fires were still burning with little containment, and others that ignited later in the week also required aggressive responses, particularly in the Hollywood Hills on Wednesday evening and in the West Hills, northwest of Los Angeles, late on Thursday. Fire officials were still focused on saving lives and homes, and said they would spend time later looking at whether their preparations had been sufficient.

Advertisement

“It wasn’t for a lack of preparation and decision making that resulted in this catastrophe,” Chief Marrone said at a news briefing on Saturday. “It was a natural disaster.”

The coming analysis, several experts said, will have to take into account that the standard guidelines that have long determined red-alert fire responses may no longer apply, as weather and fires become more virulent.

“There’s going to be a real reckoning about land use, escape routes, water pressure, water supply,” said Zev Yaroslavsky, a former longtime Los Angeles City Council member and county supervisor. Mr. Yaroslavsky said the fire might serve as a “Pearl Harbor” moment for the city, an alarm bell that signals fundamental new questions about how the city approaches the threat of wildfires.

“A lot,” he said, “will be reassessed.”

Nicholas Bogel-Burroughs and Ivan Penn contributed reporting.

Advertisement
Continue Reading

News

Co-leader of Germany’s far-right AfD calls for mass deportations

Published

on

Co-leader of Germany’s far-right AfD calls for mass deportations

Unlock the Editor’s Digest for free

The co-leader of the far-right Alternative for Germany has called for mass deportations of immigrants as the party launched its programme for next month’s nationwide elections.

In a fiery speech to supporters in the small town of Riesa in Saxony, east Germany, Alice Weidel said that under the AfD — which is second in the polls with a record vote share of around 20 per cent — Germany would witness “repatriations on a large scale”.

Weidel, AfD’s candidate for chancellor in the elections, used the controversial term “remigration” to describe the policy.

Advertisement

The word was coined by right-wing Austrian ideologue Martin Sellner, who defines “remigration” as forcibly removing immigrants who break the law or “refuse to integrate”, regardless of their citizenship status — an idea that critics say is akin to ethnic cleansing.

On Saturday Weidel said: “I have to tell you quite honestly: if it’s called remigration, then it’s called remigration.”

She was met with loud applause from party delegates who also repeatedly shouted “Alice für Deutschland” — a play on the forbidden Nazi-era slogan “Alles für Deutschland”, meaning “everything for Germany”.

Weidel, a former Goldman Sachs analyst, has positioned herself as the more presentable face of a party that includes ultraradicals who have been classified as right-wing extremists by Germany’s domestic intelligence agency.

Earlier this week in a joint appearance on X with Elon Musk, Weidel used the unprecedented public platform to argue that the AfD — which also promotes normalisation of relations with Moscow and the tearing down of wind turbines — had become a mainstream political force.

Advertisement

However, it has little chance of coming to power in the upcoming elections because all of Germany’s other major parties have ruled out going into coalition with it.

Weidel’s embrace of remigration was seen by some in the party as a nod to Björn Höcke, the flag-bearer of the radical right who led AfD to a historic first-place finish in regional elections in the east German state of Thuringia in September.

“It is a concession to Björn Höcke,” said Kay Gottschalk, a member of the German Bundestag who belongs to the more moderate flank of the party. “It is a word, of course. I would express it in another way — sending them back — but that is what delegates want.”

Weidel also used her speech to repeat her call for the Nord Stream gas pipeline from Russia to Germany to be brought back into operation, to bring back nuclear power and to rail against gender studies programmes.

The party gathering was met with large-scale protests. Around 10,000 anti-AfD demonstrators turned up and police put Riesa, a town of 30,000 people, under lockdown, delaying the start of the conference by two hours.

Advertisement
Continue Reading

News

The architecturally significant houses destroyed in L.A.'s fires

Published

on

The architecturally significant houses destroyed in L.A.'s fires

Los Angeles has Frank Gehry’s glorious Walt Disney Concert Hall, the space-age wonder of the LAX Theme Building and the stack-of-vinyl needle drop that is the Capitol Records building. For some design geeks, however, the heart and soul of L.A.’s architecture resides not just in its museums and office towers but also in its exalted, often otherworldly houses.

Those homes — especially those designed by Midcentury greats such as John Lautner, Richard Neutra, Ray Kappe, and Charles and Ray Eames — have been the obsession of those tracking the threats posed by firestorms laying waste to the wooded canyons and grassy hillsides that are the scenic backdrops for these residences.

Beloved landmarks by Frank Lloyd Wright, Rudolph Schindler and others stand outside of the immediate fire threat, but other notable houses have not been so lucky. Here’s a partial accounting of the confirmed losses:

Zane Grey Estate, Altadena: This home, with elements of Spanish, Mission and Mediterranean Revival design on 1.2 acres west of Lake Avenue, was built by architects Myron Hunt and Elmer Grey in 1907 for Chicago business machine manufacturer Arthur Herbert Woodward. At the time of its construction, it was called the first fire-proof structure in Altadena because it was built of reinforced concrete. (Woodward’s wife had lived through the devastating 1903 Iroquois Theater fire in Chicago, which erupted during a performance, killing more than 600.) The author Zane Grey bought the home in 1920, and he and his wife built a 3,500-square floor addition, including a library and office where Grey used to write. The 7,240-square-foot home was put on the market for about $4 million in 2020 and was listed as having eight bedrooms, four bathrooms, a commercial kitchen with a 15-foot ceiling, as well as a main kitchen, wine cellar and massive basement. Original cast-iron sconces, iron handrails and chandeliers remained in the house, which is on the National Register of Historic Places.

The Andrew McNally House: Architect Frederick L. Roehrig built this Queen Anne-style mansion for Rand McNally Publishing Co-founder and President Andrew McNally in 1887. McNally paid Roehrig $15,000 to design the mansion at East Mariposa Street and Santa Rosa Avenue, in an area that would soon be called Millionaire’s Row. The home had a three-story rotunda with views of the San Gabriel Mountains, and McNally kept a private railway car there. He had a gardener who nurtured the deodar cedars along a part of Santa Rosa that became known as Christmas Tree Lane.

Advertisement

The Keeler House: In 1990 modernist architect Ray Kappe remodeled a home for jazz singer Anne Keeler and her then-husband, Gordon Melcher. The 4,142-square-foot cantilevered post-and-beam structure, nestled in a woodsy hillside with canyon and coastline views, went on the market for $12 million in April. With four bedrooms and three bathrooms, the house had walls and floors of concrete complemented by a palette of redwood, teak, fir and glass block. Kappe founded the Southern California Institute of Architecture in 1972 and died in 2019 at age 92.

Janes Village: This cluster of historic English cottages was built between 1924 and 1926 by architect Elisha P. Janes (known professionally as E.P. Janes). Janes built at least 270 English- and Spanish-style cottages in the area. These were mostly single-story stucco-finished homes with six rooms, arranged in one of four floor plans and priced to be accessible to the middle class.

Gregory Ain’s Park Planned homes: Designed in 1948 by Ain with the help of the era’s premier modernist landscape architect, Garrett Eckbo, this strip of 28 Midcentury Modern homes was built as part of a social experiment conceived by a modernist architect focused on cost-effective, prefabricated design for working people. The area was created to look like a park with no front fences and continuous landscaping. The homes had side-facing garages and interior courtyards and glass walls, making them feel a bit like mini estates.

Bridges House: Anyone who has driven down Sunset Boulevard toward the coast will remember the Brutalist Bridges House, by architect Robert Bridges. After working on homes including his own, Bridges became a professor of real estate finance at the USC Marshall School of Business, where he is professor emeritus. His striking home was perched above the boulevard, its wood and glass cantilevered over a concrete base.

Will Rogers’ home: The actor’s ranch house, part of Will Rogers State Historic Park, was destroyed in the Palisades fire. In the 1920s Rogers built a 31-room residence with 11 bathrooms, a guesthouse, a golf course, stables and a corral on about 360 acres. In 1944 the compound and grounds became a park and museum after his widow, Betty, donated them to the state. “The Rogers family is devastated by the loss of the California ranch and the overwhelming loss of the community,” Jennifer Rogers-Etcheverry, the actor’s great-granddaughter, said in a statement. “Our hearts go out to all those neighbors who have lost their homes.”

Advertisement
Continue Reading

Trending