Dangote refinery set for global oil market, receives US crude shipments – Newstrends
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Dangote refinery set for global oil market, receives US crude shipments

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Dangote Refinery, Aliko Dangote

Dangote refinery set for global oil market, receives US crude shipments

The Dangote refinery is set to reshape global oil flows as it ramps up operations, according to a report by S&P Global.

The refinery, which began operations in January, has already received 18 shipments of US crude oil, making up 30% of the total 47 cargoes delivered to date.

The 650,000 barrels per day (bpd) facility, developed by Africa’s richest man Aliko Dangote, aims to achieve fuel self-sufficiency for Nigeria.

S&P Global’s August 1 report highlights the refinery’s swift impact, noting that it had reached a production capacity of 400,000 bpd within six months.

This output includes diesel, jet fuel, naphtha, and fuel oil for both domestic and international markets.

Production of petrol is expected to commence by mid-August.

The report stresses that the refinery’s operations are already influencing crude oil markets.

Notably, it has led to a reduction in the number of Nigerian oil cargoes being exported, as the facility imports US WTI Midland, a light sweet crude oil.

The refinery’s preference for WTI Midland and lighter Nigerian crudes is expected to tighten the market for these grades.

A West African crude trader quoted in the report suggested that the completion of the refinery’s ramp-up to full capacity could significantly disrupt the market for WTI Midland crude.

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Designed to primarily process Nigerian crude, the Dangote refinery can also handle other light and medium crudes. So far, it has received about 170,000 bpd of Nigerian crude from 47 shipments, including 20 from the Nigerian National Petroleum Company (NNPC) Limited. Long-term supply contracts for US WTI Midland have been secured, favoured for its competitive pricing.

As of July 31, WTI Midland was priced at $82.36 per barrel in Rotterdam, slightly lower than Nigeria’s Bonny Light at $82.80 per barrel.

However, ongoing foreign exchange challenges have caused delays in unloading some WTI Midland shipments.

The report notes that the refinery’s operations have had a ripple effect on international markets, particularly in Europe, the largest consumer of Nigerian crude oil. European imports of Nigerian crude have declined since the refinery began operations, with only US oil imports decreasing more.

Increased crude supplies from Brazil, Egypt, Libya, and Guyana have been observed, while Nigeria, traditionally an exporter, has seen a significant rise in WTI Midland imports. This shift is impacting Asia and Europe, major markets for US crude.

European imports of WTI Midland have surged by 20% over the past two years, filling gaps left by sanctions on Russian oil.

However, Nigerian crude exports have declined, dropping from 1.5 million bpd in Q4 2023 to 1.24 million bpd in Q2 2024.

Despite market fluctuations, the Dangote refinery has denied any allegations of reselling imported US and Nigerian crude oil.

Dangote refinery set for global oil market, receives US crude shipments

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Nigeria’s foreign reserves in marginal increase, now $40.88bn 

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Nigeria’s foreign reserves in marginal increase, now $40.88bn

 

Nigeria’s foreign reserves rose to $40.88 billion as of November 21, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said.

Cardoso disclosed this on Tuesday at a press conference after the Monetary Policy Committee’s 298th meeting in Abuja.

He said the external reserves grew from $40.06 billion at the end of October to $40.88 billion in November.

The amount represents an increase of $82 million or 2.05 per cent in 21 days.

“The external reserves rose marginally to 40.88 billion as of 21 November 2024, from 40.06 billion at the end of October 2024, available to finance 17 months of imports,” he said.

However, from the apex bank’s website, the increase in Nigeria’s foreign reserves showed $40.27 billion on November 22.

Cardoso also said, “The process of getting us where we are in terms of reserves has been a long one”.

“It is a clear indication that the policies we have put in place are certainly yielding fruits,” he added.

“However, and it’s very important to make a distinction here and to reiterate the fact that reserves are there for a multiplicity of different purposes, not least of which is to create buffers in the event of unanticipated shocks.

“So they are not there to simply whittle away. They are there to be used to more or less defend yourself where that becomes necessary

“And when we talk about shocks that are not anticipated, I think we can see how the global economies are.”

Cardoso also said the bank would continue to intensify efforts to stabilise the currency and prices.

The CBN governor said, “The currency has been stable compared to what it was in June”.

But he said for the value of the country’s currency to be stable, there must be increased exports and diversification of the economy.

Cardoso said diaspora remittance had increased due to policies put in place.

He commended those in the diaspora for helping the country accomplish over $600 million in remittances.

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Naira rises to N1,755/$ in parallel market

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Naira rises to N1,755/$ in parallel market

The Naira yesterday appreciated to N1,755 per dollar in the parallel market from N1,770 per dollar on Monday.

Similarly, the Naira appreciated to N1,659.44 per dollar in the Nigerian Autonomous Foreign Exchange Market, NAFEM.

Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N1,659.44 per dollar from N1,675.62 per dollar on Monday, indicating N16.18 appreciation for the naira. The volume of dollars traded (turnover) increased by 219.5 percent to $425.98 million from $108.79 million traded on Monday.

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Consequently, the margin between the parallel market and NAFEM rate narrowed to N95.56 per dollar from N117.38 per dollar on Monday.

 

Naira rises to N1,755/$ in parallel market

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PH refinery to blend 1.4-million litre petrol daily – NNPC

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PH refinery to blend 1.4-million litre petrol daily – NNPC

 

Rehabilitated old Port Harcourt refinery is currently operating at 70 per cent of its installed capacity, the Nigerian National Petroleum Company Limited has said.

The Port Harcourt Refining Company (PHRC) operates two refineries: the old refinery with a capacity of 60,000 barrels per stream day (bpsd) and a new refinery with an installed capacity of 150,000 bpsd.

The NNPCL in a statement on Tuesday, said it planned to increase the operation to 90 per cent of the refinery’s capacity.

“The Board and Management of the Nigerian National Petroleum Company Limited (NNPC Ltd) express heartfelt appreciation to Nigerians for their support and excitement over the safe and successful restart of the 60,000 barrels-per-day Old Port Harcourt Refinery,” the statement reads.

“This achievement marks a significant step forward after years of operational challenges and underperformance.

“We are, however, aware of unfounded claims by certain individuals suggesting that the refinery is not producing products. For clarity, the Old Port Harcourt Refinery is currently operating at 70% of its installed capacity, with plans to ramp up to 90%.”

According to NNPC, the refinery has commenced production of daily outputs of straight-run petrol (naphtha), which is blended into 1.4 million litres of petrol.

The national oil company said the refinery has also started producing 900,000 litres of kerosene per day and 1.5 million litres per day of diesel.

The NNPC said 2.1 million litres daily volume of low-pour fuel oil (LPFO) would also be produced at the refinery, adding that additional volumes of liquefied petroleum gas (LPG) will be refined at the plant.

“It is worth noting that the refinery incorporates crack C5, a blending component from our sister company, Indorama Petrochemicals (formerly Eleme Petrochemicals), to produce gasoline that meets required specifications,” NNPC said.

“Blending is a standard practice in refineries globally, as no single unit can produce gasoline that fully complies with any country’s standards without such processes.”

Additionally, the NNPC said it has made substantial progress on the new Port Harcourt refinery, “which will begin operations soon without prior announcements”.

“We urge Nigerians to focus on the remarkable achievements being realized under the able and progressive leadership of President Bola Tinubu and to support efforts aimed at delivering more dividends to the nation,” the energy firm said.

According to the statement, malicious attacks on “clear progress” only undermine the “significant strides made by NNPC Ltd and the country”.

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