Dangote Refinery acquires additional 5 million barrel of crude oil from US – Report
Dangote Refinery is ramping up crude oil production with a purchase of an additional 5 million barrels from the United States of America (US), according to data from Bloomberg.
The data show that the refinery purchased 5 million barrels of WTI Midland for delivery in August and September.
In addition, the oil company also initiated a tender process to purchase an additional 6 million barrels of American crude for September.
Dangote has purchased over 16 million barrels of West Texas Intermediate crude oil this year, according to Bloomberg data.
Based on tenders for new supply observed by Bloomberg, the proportion of crude from the US, compared to Nigerian barrels, is expected to increase in August and September.
Why Dangote is turning to the US for Crude Oil
Devakumar Edwin, the Vice President of Oil and Gas at Dangote Industries Limited (DIL), had earlier accused International Oil Companies (IOCs) in Nigeria of inflating the price of crude above market rate.
Edwin said this price manipulation is pushing the refinery to import crude from distant countries like the United States, leading to significantly higher costs.
He alleged that the IOCs are actively trying to undermine the Dangote Oil Refinery and Petrochemicals.
The $19 billion refinery is set to begin supplying Petrol this July, according to the chairman and CEO of the company, Aliko Dangote.
The CEO said the refinery will commence production of petrol between 10 and 15 of July, while supply to local marketers will commence from the third week of the same month.
“We had a bit of delay, but PMS will start coming out by 10 to 15 of July. But then we want to keep it in the tank to make sure that it settles. So by the third week of July, we’ll be coming out to take it into the market,” Dangote said in May.
What you should know
Nairametrics earlier reported that the National Regulatory Commission (NUPRC) has reached an agreement with producers to permit the sale of crude oil to domestic refiners at market prices.
This resolution ends a supply dispute that has strained relations with international oil companies.
The NUPRC Chief Executive, Gbenga Komolafe emphasized that pricing issues should not hinder domestic refining.
“We will never allow price strangulation to disincentivise our domestic refining capacity optimisation,” said Komolafe.
This is to address complaints raised by local refiners, including the Dangote refinery, that the IOCs are inflating the price of their crude oil to force them out of the market.
