By Adewale Sanyaolu with agency reports
Not ready to take chances over likely epileptic supply which may threaten its operations, Dangote refinery is set to import crude from the US in the coming months.
The 650,000 barrels per day refinery had to scale down, beginning operations with 350,000 barrels per day.
In August 2023, Nigeria pledged a total of 164.25 million barrels of crude oil — at 90,000 barrels per day (bpd) — starting from 2024 to repay the loan through Project Gazelle. Afreximbank had said it successfully arranged an initial disbursement of $2.25 billion under the crude oil prepayment facility.
In June last year, OPEC+ cut Nigeria’s output target for 2024 to 1.38 million barrels per day from 1.74 million bpd for 2023, reflecting the fact that for years Nigeria had failed to meet its targets.
The group, however, agreed to give Nigeria a 2024 quota of 1.58 million bpd, subject to independent verification that it could really pump that much.
While the refinery primarily sources domestic crude through a supply agreement with the trading arm of the state-owned NNPCL, it recently received its first shipment of Nigeria’s Agbami crude, facilitated by a trading unit of Shell. Subsequent deliveries included Nigeria’s Amenam, Bonny Light, and CJ Blend streams.
According to Bloomberg, Trafigura Group sold 2 million barrels of West Texas Intermediate (WTI) Midland to Dangote refinery for end-February delivery, said traders with knowledge of the matter. This is the first time that the refinery has purchased non-Nigerian crude, traders said.
The move by Dangote to seek external feedstock supply for its operations maynot be unconnected with doubts hitherto expressed by industry observers that the Nigerian State maybe unable to meet the crude oil demand for the refinery.
They argued that crude oil theft, lack of new investment in fresh oil fields may cause a major setback for the refinery.
Recall that modular refinery operators had consistently lamented that their inability to access crude oil was hampering their operations.
Prior to the commencement of operations at Dangote refinery, industry observers have expressed doubt over the ability of the Nigerian State to meet the crude oil demand supply the refinery.
Nigeria is looking to boost output by resurrecting dormant oilfields and pushing more production onshore, and is introducing fresh measures to address security threats.