Dangote Refinery to Buy 24m Barrels Of Crude From US
iexclusivenews – In a strategic move to bolster its processing capabilities, the Dangote Refinery has embarked on a significant procurement plan, securing a steady supply of crude oil from the United States.
This initiative is set to span over the upcoming year, with the refinery acquiring a substantial 24 million barrels of US crude.
A recent Bloomberg report has shed light on the refinery’s financial commitment, revealing a $20 billion term tender.
This agreement entails the monthly purchase of 2 million barrels of West Texas Intermediate Midland (WTI) crude, commencing in July and continuing for a year-long period.
READ MORE: Exclusive: Dangote Refinery’s First Fuel Cargoes Set for Export!
The decision to import US oil underscores the challenges Nigeria faces in boosting its own crude production, which lags behind its full potential.
The move also signals Dangote’s proactive approach to sourcing more cost-effective supplies internationally, underscoring the refinery’s emerging role in the global crude and fuel markets.
Elitsa Georgieva, an authority in the African energy sector and Executive Director at Citac, commented on the situation.
“Nigerian crude supply is often insufficient, sometimes unreliable. In contrast, WTI is readily available, reliably supplied, and competitively priced,” she explained.
This diversification in feedstock procurement not only offers economic advantages but also enhances the refinery’s operational flexibility.
Despite being a member of the Organization of Petroleum Exporting Countries (OPEC), Nigeria has struggled to meet its production quotas for over a year.
Factors such as crude theft, aging infrastructure, and reduced investments have hampered the nation’s output, which stood at approximately 1.45 million barrels per day in April, a figure significantly lower than the theoretical capacity of 2.6 million barrels per day.
In response, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has introduced new draft rules aimed at ensuring sufficient local crude supply.
These regulations mandate Nigerian oil companies to prioritize domestic refineries for their crude sales, with export permissions contingent upon fulfilling these obligations.
The NUPRC’s regulations could prove advantageous for the Dangote Refinery, potentially facilitating access to local crude sources and reducing reliance on imports.
Currently operating at half its capacity, the refinery has been capitalizing on cost-effective US oil imports, which constitute a significant portion of its feedstock.
Records indicate the reception of at least one supertanker monthly, each laden with around 2 million barrels of WTI Midland crude.
While Dangote officials have refrained from commenting on the report, the implications of these developments are clear.
The refinery’s strategic procurement and Nigeria’s regulatory adjustments are poised to reshape the landscape of crude oil supply and trade, both locally and internationally.
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