Dangote resumes buying US crude after 3-month pause
The Dangote Petroleum Refinery has resumed importing crude oil from the United States as part of its efforts to boost production and expand refining capacity.
This follows a three-month pause in foreign crude purchases, during which the refinery focused on sourcing oil domestically.
According to a Bloomberg report on Wednesday, a shipment carrying two million barrels of WTI Midland crude from Chevron Corp is scheduled for delivery to the refinery next month.
This move could suggest that the Federal Government’s naira-for-crude initiative has faced setbacks or that the refinery is not receiving sufficient crude supply from the Nigerian National Petroleum Company Limited.
After a three-month hiatus, Dangote Refinery has purchased its first shipment of US oil as it continues to scale up production.
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The refinery bought approximately two million barrels of WTI Midland crude from Chevron Corp.
Chevron has arranged for the supertanker Azure Nova to load the crude from the US Gulf around December 5, with the shipment destined for Dangote, according to tanker fixture details.
Earlier this year, Dangote Refinery typically received one or two supertankers of US crude each month, in addition to domestic supplies. However, imports were scaled back around August after an agreement with the federal government, under which the NNPCL would supply crude oil to the refinery in naira instead of dollars. The agreement stipulated that Dangote would receive up to 400,000 barrels per day of Nigerian crude, paid for in local currency.
Dangote has been increasing its influence in both the US and European oil markets, gradually raising its purchases of crude from Nigeria and the US. This growing demand for barrels from the refinery is intensifying competition for oil among traditional buyers in Europe.
The reasons for resuming US oil imports remain unclear, although a report from Sparta Commodities this week suggests that lower shipping costs may have recently made US oil more affordable in Europe.
Additionally, it was reported on Monday that the refinery is seeking to raise billions of dollars to boost crude imports and increase production.
The report stated that Aliko Dangote, Chairman of Dangote Group, is in active discussions with commercial lenders, development banks, oil traders, and other industry players to secure funding for crude oil supplies to be processed into refined products.
According to the report, the refinery requires a minimum supply of 300,000 barrels per day to meet its capacity and ensure a steady flow of crude.
On Tuesday, the plant began shipping refined petroleum products to West African countries, signaling to traders that the operations of the mega-refinery could soon disrupt regional fuel markets.
In a new development on Wednesday, Dangote Group highlighted its achievement of building a refinery in Nigeria, a feat that international oil companies have not been able to accomplish.
Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, made this statement while hosting members of the Senate Committee on Trade and Investment at the refinery complex in Lekki, Lagos State.
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During the visit, led by Committee Chairman Sadiq Umar, Edwin told the senators that Dangote Group had accomplished what major oil companies like Shell, Chevron, and ExxonMobil had never achieved anywhere in the world. He emphasized that a Nigerian company had taken on the challenge of constructing the world’s largest single-train refinery.
In a new development on Wednesday, Dangote Group highlighted its achievement of building a refinery in Nigeria, a feat that international oil companies have not been able to accomplish.
Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, made this statement while hosting members of the Senate Committee on Trade and Investment at the refinery complex in Lekki, Lagos State.
During the visit, led by Committee Chairman Sadiq Umar, Edwin told the senators that Dangote Group had accomplished what major oil companies like Shell, Chevron, and ExxonMobil had never achieved anywhere in the world. He emphasized that a Nigerian company had taken on the challenge of constructing the world’s largest single-train refinery.
Located within the Lekki Free Zone in Lagos, the refinery, with a capacity of 650,000 barrels per day, began production in January this year. It started by releasing diesel and aviation fuel into the local market while also exporting to other countries.
In September, the facility began producing premium motor spirit (PMS), following weeks of controversy with international oil companies (IOCs) over crude oil supply.
Dangote Group President, Aliko Dangote, accused the IOCs of refusing to sell crude to the refinery, alleging an attempt to sabotage its operations. After interventions from the president, the refinery began receiving crude oil paid for in naira, aimed at boosting local petrol supply.
Reports indicate that the refinery may soon begin exporting petrol to other West African countries.
Proofreading by Uchechi Ojo, Sub-editor at NeptunePrime.
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