Dangote Refinery imports an extra 11 million barrels of US crude oil because of a deficit in domestic supply.

Nigerian crude oil producers are unable to meet its feedstock requirements, Dangote Petroleum Refinery and Petrochemicals has released a tender for an additional 11 million barrels of US crude oil over the next six months. Since the beginning of 2024, the refinery that processes 650,000 barrels per day has already imported 9 million barrels of West Texas Intermediate crude from the United States to counterbalance the unstable domestic supply. The world’s largest single-train facility, located in Ibeju Lekki, Lagos, is set to receive two million barrels of WTI Midland crude per month for the next six months, beginning in August, through the new tender, which closes on July 21.

Thank you for visiting The Vestigator, don't forget to share!

Dangote Refinery bought five million barrels of West Texas Intermediate (WTI) Midland crude in an auction that was reported by Bloomberg. The oil will be delivered in the following months, August and September. The business also started a tender procedure to purchase an extra six million barrels of US crude for September. Nigeria’s dependence on US crude underscores the country’s difficulties in satisfying its own refining requirements, which are caused by problems including dwindling production, outdated infrastructure, and theft of crude. Nigeria’s daily production in April was a mere 1.45 million barrels, far less than its daily potential of 2.6 million barrels. In the first four months of 2024, the nation reported an estimated 30 million barrels of underproduction.

The Dangote Refinery, which is essential to Nigeria’s ambition to become a net exporter of petroleum products, has had to import crude in order to continue operating due to a lack of domestic supply. Aliko Dangote, the president of the Dangote Group, said at the Africa CEO Forum 2024 that unless production picks up and other supply contracts are looked for, the refinery will have to keep importing crude. “Tendering for crude makes financial sense for us as well. We can’t wait, but it would be great if we could source all of our crude from Nigeria,” Dangote stated. Dangote continued, “We need different types and mixes of crude, so it’s a bit difficult for us to source the entire volume that we’re looking for domestically.” in response to questions about the difficulty of finding petroleum locally. Unless crude production improves – which we pray and hope for – we need to go elsewhere.”

According to tanker-tracking data, the refinery received almost 41 million barrels of feedstock in the first half of the year as it finished test runs and gradually increased processing rates. Approximately 25% of that has come from American suppliers. In contrast to the approximately 18 million barrels of Nigerian crude supplies, the refinery received 11 WTI cargoes, or 9 million barrels, between February and May, according to CAS. Due to operational limitations, the Nigerian National Petroleum Company (NNPC) has found it difficult to fulfill its daily commitment of 300,000 barrels to the refinery.

S&P Global, an international financial analytics company, recently stated that Nigeria’s foreign exchange (forex) problem and the significant pressure it puts on the Naira currency can be resolved, and that the Dangote Petroleum Refinery and Petrochemicals company can also accelerate the nation’s economic development. This was revealed during an on-site inspection to the refinery by S&P Global, which has its headquarters in Manhattan, New York City, as part of its sovereign credit ratings assessment of Nigeria. Federal Ministry of Finance representatives accompanied the delegation from the international rating agency. According to S&P, the refinery will support Nigeria’s expanding economy in addition to strengthening the country’s oil industry.

Vice President of Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin, recently revealed that the refinery, which is currently running at a capacity of 350,000 barrels per day, will scale up to at least 500,000 barrels per day capacity by July/August, starting the refining of gasoline and ultra-low sulfur diesel. He mentioned that the refinery complies with Euro V requirements and is built to process a variety of crudes, including light oil from the United States and various African and Middle Eastern countries. Furthermore, it is engineered to meet the emission criteria set forth by the US EPA, the European Union (EU), the Department of Petroleum Resources (DPR), the African Refiners and Distribution Association (ARDA), and other regulatory bodies.

Although he acknowledged that foreign firms constructed the majority of refineries, he expressed satisfaction in the fact that a Nigerian company planned and constructed the largest single-train refinery complex in the world, serving as its own direct Engineering, Procurement, and Construction (EPC) contractor. The refinery can meet Nigeria’s needs for all liquid products (gasoline, diesel, kerosene, and aviation jet) and have excess of each commodity for export. It also includes a self-sufficient maritime facility that can handle the largest boats in the world.

Share This Article