3 months ago
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BY TEMITOPE ADEBAYO
Dangote refinery is repositioning to raise production to 550,000 barrels per day (bpd) this year, equivalent to 85 per cent of capacity.
The refinery is already looking towards importing crude from Libya because it needs to increase crude imports due to insufficient domestic supplies.
Chief Executive of Dangote Group, Aliko Dangote said, the 650,000-bpd capacity refinery, which is the largest in Africa, had only received five crude cargoes from the Nigerian National Petroleum Company Limited (NNPCL); since it started operating earlier this year, instead of the 15 it expected.
‘That is why we went ahead and bought some Brazilian crude, we also got U.S. crude. Anytime we go to IOCs (international oil companies) they say go to brokers,’ Dangote, said during a tour of the facility on the outskirts of Lagos. He added that brokers were charging a $4 mark-up per barrel of crude.
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The NNPCL had, in the past, agreed to supply the refinery 300,000 bpd but it is struggling with low production and some of its crude is being exchanged for gasoline imports, Reuters news agency reports. Nigeria is one of world’s top oil producers, but relies on importation of refined petroleum products due to insufficient local refining. State-owned refineries have collapsed over the years.
The Dangote refinery, built at a cost of $20 billion, began production in January after several years of delays. There has been hope that it would plug the gap in refining oil in Nigeria, Africa’s economic powerhouse.
Meanwhile, Dangote refinery has opened discussions with Libya to secure crude oil for its 650,000 barrels per day (bpd) plant and is also exploring options to source oil from Angola, according to a senior executive.
This move comes as the refinery seeks to address challenges with domestic supplies.
The long-awaited $20 billion refinery has been hailed as a transformative force for Nigeria and the energy sector across sub-Saharan Africa.
However, since the refinery began operations in January, it has faced difficulties in securing adequate crude supplies within Nigeria. Despite being Africa’s largest oil producer, Nigeria grapples with issues such as theft, pipeline vandalism, and low investment. As a result, Dangote has had to import crude from distant sources like Brazil and the United States.
‘We are talking to Libya about importing crude. We will talk to Angola as well and some other countries in Africa,’ Dangote refinery’s senior executive, Devakumar Edwin told Reuters. He added that international traders and oil companies are among the largest buyers of Dangote’s gasoil, much of which is being exported.
“The biggest offtakers are the two big traders Trafigura and Vitol and BP and, to some extent, even TotalEnergies. But all of them are saying they are taking it to offshore,” Edwin said.
Traders and shipping data indicate that Dangote is ramping up gasoil exports to West Africa, capturing market share from European refiners. Edwin stated that, Dangote’s oil trading arm is now operational, with staff based in London and Lagos, to manage supplies and sell products. Reuters first reported on the planned trading arm in March.
Nigeria’s Midstream and Downstream recently claimed that the sulphur content in its gasoil exceeds the required limit of 200 parts per million (ppm). However, Dangote refuted claims that petroleum products from his refinery are substandard.
Dangote recently revealed plans to list the fertilizer and petrochemical divisions of the Dangote Refinery on the Stock Exchange in the first quarter of 2025.
The refinery was recently ranked above Europe’s 10 largest refining facilities.
English (US) ·