Nigeria’s Dangote refinery is in active negotiations with Libya to secure crude oil for its 650,000 barrels per day (bpd) plant. The refinery, the largest in Africa, is also looking to Angola for potential oil supplies, a senior executive revealed.
The $20 billion refinery, constructed by Africa’s richest man Aliko Dangote, aims to end Nigeria’s reliance on imported fuels due to the country’s insufficient refining capacity. Since beginning operations in January, the refinery has struggled to obtain adequate crude supplies domestically. Despite being Africa’s top oil producer, Nigeria faces issues like oil theft, pipeline vandalism, and low investment, which have hindered local supply.
As a result, the Dangote refinery has turned to importing crude from distant sources such as Brazil and the United States. Devakumar Edwin, a senior executive at the refinery, stated, “We are talking to Libya about importing crude. We will talk to Angola as well and some other countries in Africa.” Although Edwin did not provide detailed information about these discussions, he indicated that international traders and oil companies are major buyers of Dangote’s gasoil, most of which is being exported.
Increasing Gasoil Exports
Dangote’s refinery has been ramping up gasoil exports to West Africa, increasingly capturing market share from European refiners. Edwin noted that the biggest buyers are major trading firms like Trafigura, Vitol, BP, and TotalEnergies. “The biggest off-takers are the two big traders Trafigura and Vitol and BP and, to some extent, even TotalEnergies. But all of them are saying they are taking it offshore,” Edwin said.
To manage its supply chain and product sales more effectively, Dangote has established an oil trading arm with staff based in London and Lagos. Reuters had initially reported on this development in March.
The refinery has faced challenges from Nigeria’s upstream regulator over the sulfur content in its gasoil. The regulator claimed that the sulphur levels exceeded the required limits of 200 parts per million (ppm). Aliko Dangote, however, refuted these claims, stating that the sulfur content was high initially but has since dropped to 88 ppm. He assured that it would further decrease to 10 ppm by early August as production increases.
Despite these challenges, the Dangote refinery continues to push forward with its operations, seeking new partnerships and solutions to ensure a steady supply of crude and maintain its position in the market.
Source: Reuters
