Dangote Refinery’s Plan To Import 24 Million Barrels Of Crude Oil From US

The Dangote Refinery has announced its intention to acquire a minimum of 24 million barrels of US crude within the next year to enhance its processing capabilities. This decision follows the issuance of a term tender by the $20 billion refinery for purchasing 2 million barrels per month of West Texas Intermediate Midland (WTI) crude, starting in July and lasting for a year. The primary goal of this procurement is to tackle Nigeria’s ongoing challenge of fully utilizing its crude production potential.

Dangote’s move to source cheaper crude oil from international markets underscores the refinery’s increasing influence in global crude and fuel trading. Elitsa Georgieva, the Executive Director at Citac, has highlighted the inadequacies and inconsistencies in Nigerian crude supply, contrasting it with the reliability and availability of WTI, which also offers competitive pricing. This strategic shift provides Dangote’s refinery with greater flexibility and economic benefits.

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Nigeria’s failure to meet its OPEC+ quota for more than a year, with production standing at approximately 1.45 million barrels per day in April compared to its capacity of 2.6 million barrels, is attributed to various factors such as crude theft, aging infrastructure, limited investment, and disinvestments by oil majors. In response, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has developed regulations requiring oil producers to prioritize domestic refineries for crude sales before considering any surplus for export.

This policy is designed to support local refineries like Dangote’s, which currently rely on importing cheaper US oil due to inadequate domestic supply. The proposed regulations have the potential to facilitate increased access to domestic crude for Dangote, thereby bolstering its operations and contributing to Nigeria’s efforts to enhance its refining capacity and reduce its reliance on imported fuels.