Dangote Refinery Seeks Millions of Barrels of US Crude Amid Nigeria’s Oil Output Challenges


Dangote Mega Refinery in Lagos Seeks Millions of Barrels of US Crude Amid Nigeria’s Oil Output Challenges

Thank you for reading this post, don't forget to subscribe!

Nigeria’s newly established Dangote mega refinery, situated near Lagos, has initiated plans to procure millions of barrels of US crude within the upcoming year to support its escalating processing rates. This move underscores the hurdles encountered by Africa’s largest oil producer in boosting its own oil output.

The refinery, spearheaded by Africa’s wealthiest individual, Aliko Dangote, has issued a term tender for the acquisition of 2 million barrels per month of West Texas Intermediate Midland crude for a 12-month period starting in July. This development, disclosed through a document obtained by Bloomberg, signals the significant impact the refinery will have on global crude and fuel trading dynamics.

Nigeria’s ongoing struggles to enhance its crude production, coupled with Dangote’s inclination towards accessing more cost-effective supplies abroad, are highlighted by the call for US oil. Elitsa Georgieva, executive director at Citac, an energy consultancy specializing in the African downstream sector, emphasized the challenges faced with Nigerian crude supply, contrasting it with the availability and reliability of WTI crude.

The procurement of diverse feedstocks offers the refinery increased flexibility and strategic options, making the tender economically viable for Dangote, as stated by Georgieva.

Despite being a member of OPEC+, Nigeria has been unable to meet its quota for over a year. April’s crude and liquids production stood at approximately 1.45 million barrels per day, significantly lower than its estimated capacity of 2.6 million barrels per day. Factors such as crude theft, aging pipelines, inadequate investment, and divestments by major oil companies have contributed to this decline.

To address the challenge of local supply, Nigeria’s upstream regulators recently introduced draft rules compelling oil producers to prioritize selling crude to domestic refineries.

Operating at around half its capacity, the Dangote refinery is capitalizing on the cost advantages of US oil imports, utilizing it for up to one-third of its feedstock. Since the beginning of the year, the refinery has received at least one supertanker carrying approximately 2 million barrels of WTI Midland crude each month.

An official at Dangote declined to provide comments on the matter.

–With assistance from Nduka Orjinmo and Anthony Osae-Brown.

Godwin Okafor
Godwin Okaforhttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

Share post:



More like this

‘Being beautiful is about inner peace, purpose not just appearance’ – DJ Cuppy

June 17, 2024. Azonuchechi Chukwu. Nigerian disk jockey, Florence Otedola, popularly...

Rema’s ‘Calm Down Makes History, Becomes First African Song to Earn 1 Billion Streams in US

June 17, 2024. Azonuchechi Chukwu. Nigerian singer, Divine Ikubor, aka Rema’s...

Suspected Armed Robbers Gun Down DJ in Abuja

June 17, 2024. Azonuchechi Chukwu. Suspected armed robbers attacked the Volcano...

Gunmen Attack Enugu community shoot four

June 17, 2024. Azonuchechi Chukwu. Gunmen on Saturday attacked the Umu-Ezuboke...