Dangote refinery turns to US for crude oil supply

Dangote refinery turns to US for crude oil supply

There are indications that Dangote refinery is set to turn to the US in the forthcoming months for supply of constant crude oil for the refinery.

This development was announced by Bloomberg on Monday.

Nigeria, the home country of the 650,000 barres per day refinery has been battling with inability to meet crude oil production quota in the past few years occasioned by rising incidents of crude oil theft, divestment from oil majors and insecurity across the Niger Delta.

In recent times, Nigeria has failed to meet its OPEC production quota of 1.75 mbpd for 2023 necessitating the oil cartel to cut its production quota for 2024. Perhaps, Nigeria’s erratic crude oil production levels might be responsible for Dangote refinery to look elsewhere for consistency in crude oil supply.

These factors are said to be responsible for the decision of the refinery to turn to the US for sure supply of crude.

READ ALSO:

• Jetour X70 (Liberty) offers classy mid-size family SUV with innovative technologies
• Bank customer slumps, dies outside bank hall in Taraba
• 8,285 candidates register for maiden CB-WASSCE despite initial resistance

Already, traders’ familiar with the matter disclosed that Trafigura Group has sold 2 million barrels of WTI Midland to the Dangote refinery for delivery by the end of February. This marks the first time of the refinery buying non-Nigerian crude.

The exponential growth in US oil supply over the past decade has reshaped the global market, extending its influence to regions like Asia and Nigeria, whose economy heavily relies on petroleum exports, and will be particularly impacted by these transatlantic deliveries.

The new 650,000 barrel-a-day oil refinery commenced operations earlier this month. Initially targeting a processing rate of 350,000 barrels per day, the refinery aims to gradually escalate production towards its full capacity.

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.

In addition to handling domestic feedstock, the recently inaugurated mega-facility is capable of processing various African crudes, along with supplies from distant sources such as the US and Saudi Arabia, as disclosed by the Dangote Group earlier this month.

Dangote refinery turns to US for crude oil supply