More Oil for Dangote as Refinery Gets More Crude From US, Angola, Others Amid Naira-for-Crude Deal

• It has been claimed that the Dangote Refinery and Petrochemical Company is purchasing crude oil from overseas vendors
• A naira-for-crude deal is currently being discussed with the Nigerian National Petroleum Company Limited (NNPCL)
• Since the beginning of the month, almost three million barrels of U.S. oil have reportedly been sent to the Dangote plant

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

As the Dangote Refinery and Petrochemical Company progressively expands production at its plant, it is reportedly buying crude oil from foreign suppliers.

This comes in the midst of new talks with the Nigerian National Petroleum Company Limited (NNPCL) about a naira-for-crude deal. The first contract expires on March 31, 2025.

According to Bloomberg, the refinery, which produces 650,000 barrels per day, has recently imported oil from a number of countries, including Algeria, Angola, and the United States.

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Lower petrol prices expected as Dangote Refinery boosts crude import, moves to attain full capacity

In addition to supplies from Angola and Algeria, the Dangote refinery has reportedly received more than three million barrels of U.S. oil since the start of the month.

Crude deliveries to the Dangote refinery have increased from an estimated 380,000 barrels per day in January and February to an average of 450,000 barrels per day during the last two weeks, according to experts at Energy Aspects Ltd.

“Our satellite monitoring shows a recent draw in crude stocks at the refinery, indicating runs are likely on the rise,” said Randy Hurburun, a senior refinery analyst at the consultancy.

Nigeria's crude oil surplus and dependence on fuel imports have already been lessened by the Dangote Refinery, which is anticipated to reach full capacity by H1 2025 and process 650,000 barrels of oil per day when fully operational, making it Africa's largest refinery and surpassing any single refinery in Europe.

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Naira-for-crude deal still in place as NNPCL sells 84 million barrels to Dangote Refinery

Tanker-tracking data compiled by Bloomberg revealed that despite ramping up overseas purchases, the Dangote refinery remains heavily dependent on Nigerian crude. Last month alone, it took in over ten million barrels of local feedstock.

The refinery's crude sourcing strategy will continue to be determined by price competitiveness, according to industry analysts. Since signing the crude supply agreement with Dangote in October, NNPCL reported that it has provided 48 million barrels.

“WTI will continue to be an attractive grade for the refinery because of its light-sweet nature and price competitiveness with local West African grades.

“The Atlantic basin has many viable alternatives, but it all depends on the economics and terms on which they get it,” said Ronan Hodgson, an analyst at FGE.

Depending on market conditions, the refinery may also take into account crude from the North Sea, the Mediterranean, and Libya, according to the article.

Importers begin negotiating reduction

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NNPC begins new negotiations with Dangote Refinery, clarifies end of naira for crude oil deal

Legit.ng reported that importers were fighting to stay afloat and looking for alternative markets to offset growing losses as NNPC Retail Ltd. and Dangote Refinery engage in fierce competition that pushes down petrol prices.

As the operating space becomes more erratic, companies are reconsidering their methods to maintain operations in the face of declining margins and unstable global dynamics, according to information obtained by Daily Sun.

Marketers have been caught off guard by the market turmoil and are dealing with big and unexpected losses, according to sources, particularly those who have large stocks in their tank farms and impending gasoline cargoes.

Proofreading by Nkem Ikeke, copy editor at Legit.ng.

Source: Legit.ng