Nigeria’s Dangote refinery is in talks with Libya to secure crude oil for its 650,000 barrels per day (bpd) plant. According to Reuters, the Dangote refinery may also import Angolan oil as it seeks to overcome domestic supply issues.
The $20 billion refinery, built by Africa’s richest man Aliko Dangote on the outskirts of Lagos, is Africa’s largest and is designed to end Nigeria’s dependence on imported fuels due to insufficient refining capacity.
Since Dangote began operations in January, he has been unable to secure adequate supplies of crude oil from Nigeria, which, despite being Africa’s largest oil producer, is grappling with theft, pipeline vandalism and low investment.
Dangote has resorted to importing crude oil from as far away as Brazil and the United States.
“We are in talks with Libya about importing crude oil,” Devakumar Edwin, a senior executive at Dangote refinery, told Reuters late on Saturday. “We will be talking to Angola as well and some other countries in Africa.”
On the other hand, much of the diesel produced by the Dangote refinery is exported, not supplying the domestic market. With this strategy, Dangote avoids weighing on the foreign exchange market by importing oil, but it does not resolve the domestic fuel shortage, which was the objective behind the construction of the refinery.
Trader and shipping data showed Dangote was ramping up gasoil exports to West Africa, taking market share from European refiners.
Nigeria’s upstream regulator has clashed with Dangote, saying the sulfur content in its gasoil was above required limits of 200 parts per million (ppm).
Aliko Dangote denied this, saying the sulphur level was higher when production began but had dropped to 88 ppm and would fall to 10 ppm by early August as production increased.
2024-07-22 21:41:22