Dangote Refinery Nears Full Production Capacity Set To Import Crude Oil From 2 African Countries
- Dangote Refinery is set to import crude oil from two African countries for petrol and diesel production
- This decision comes as it begins new negotiations with NNPC Limited on its naira-for-crude agreement
- The federal government has provided clarification on the status of the crude agreement between NNPC and Dangote
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Dangote Refinery, Africa’s largest oil refinery is reportedly contemplating increasing its crude oil imports from Angola and Algeria.
This move comes amidst ongoing discussions with the Nigerian government regarding the naira for crude arrangement.
Source: UGC
The $19 billion Dangote Refinery, Africa’s largest oil refinery, has been key in Nigeria's drive towards petroleum self-sufficiency.
Since commencing operations, it has helped in reducing Nigeria's dependence on imported fuel.
As the refinery nears full operational capacity, it is currently considering importing crude oil to meet its production goals.
Recent data from Bloomberg reveals that the refinery has already received over three million barrels of American crude this month alone.
Additionally, it has diversified its sources by importing Angola’s Pazflor grade and Algeria’s Saharan Blend from Glencore Plc in recent weeks.
Analysts at Energy Aspects Ltd. report that crude deliveries to the Dangote Refinery have averaged 450,000 barrels per day in the past fortnight, marking an increase from an estimated 380,000 barrels per day earlier in the year.
Randy Hurburun, a senior refinery analyst at the consultancy commented:
"Our satellite monitoring shows a recent drawdown in crude stocks at the refinery, indicating increased operational activity."
Naira to crude agreement
Legit.ng reported that the Nigerian National Petroleum Company (NNPC) Limited recently clarified its naira for crude oil agreement with the Dangote refinery.
The clarification followed reports that the national oil company has suspended the policy until 2030, as it has forward-sold all its crude oil.
Source: UGC
However, NNPC debunked the reports, noting that it is in discussion with the Dangote for a new agreement as the previous deal was only for six months ending in March 2025.
The statement from NNPC reads:
"NNPC Limited has noted recent reports circulating on social media regarding the alleged unilateral termination of the crude oil sales agreement in Naira between NNPC Ltd. and Dangote Refinery.
"To clarify, the contract for the sale of crude oil in Naira was structured as a six-month agreement, subject to availability, and expires at the end of March 2025. Discussions are currently ongoing towards emplacing a new contract.
"Under this arrangement, NNPC Ltd. has made over 48 million barrels of crude oil available to Dangote Refinery since October 2024. In aggregate, NNPC Ltd. has made over 84 million barrels of crude oil available to the Refinery since its commencement of operations in 2023."
However, BusinessDay reports that Edwin Devakumar, vice-president of Dangote Industries Limited, voiced concerns, stating that the refinery needs crude:
"We need 650,000 barrels per day. NNPC committed to a minimum of 385,000 bpd, but they are failing to meet even that."
FG confirms status of naira for crude oil agreement
In a previous report by Legit.ng, Heineken Lokpobiri, the minister of petroleum resources (oil), has clarified that the government has not terminated the naira for crude oil arrangement.
The deal involves the NNPC supplying crude oil to domestic refineries, including the Dangote Refinery, with payments made in naira.
Lokpobiri explained that the deal between NNPC and Dangote Refinery was the pilot scheme.
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Source: Legit.ng
