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Politics

Report Reveals Dangote Refinery’s Plan To Import 24 Million Barrels Of Crude Oil From US

Dangote Refinery

The Dangote Refinery has announced intentions to purchase a minimum of 24 million barrels of US crude within the upcoming year to expand its processing capacities.

According to a Bloomberg report, the $20 billion refinery has issued a term tender for the acquisition of 2 million barrels per month of West Texas Intermediate Midland (WTI) crude for a duration of 12 months, commencing in July.

This procurement totals 24 million barrels of crude over the course of one year.

The call for US oil reflects Nigeria’s ongoing struggle to increase its crude production, which is still far below its potential capacity.

Dangote’s move to source cheaper supplies from abroad underscores the refinery’s potential influence in global crude and fuel trading.

Executive Director at Citac, an energy consultancy specializing in the African downstream sector, Elitsa Georgieva, said: “Supply of Nigerian crude is insufficient or unavailable and sometimes unreliable. WTI on the other hand, is available, with reliable supply and competitively priced

“Buying different feed stocks also provides flexibility and optionality for the refinery, so the tender makes economic sense for Dangote.”

Nigeria has failed to meet its OPEC+ quota for over a year, producing about 1.45 million barrels a day in April, significantly below its 2.6 million capacity.

Issues like crude theft, aging pipelines, low investment, and divestments from oil majors have led to this decline.

In response, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has issued draft rules requiring oil producers to sell crude to domestic refineries before exporting any surplus.

This policy aims to support local refineries like the 650,000 barrel-a-day Dangote refinery, which has been importing cheaper US oil due to insufficient local supply.

The new rules could enable Dangote to source more crude domestically.

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