The Dangote Refinery, Africa’s largest with a capacity of 650,000 barrels per day, is set to significantly reduce its reliance on imported crude oil from the United States, turning instead to Nigerian suppliers.
The refinery is expected to source over 80% of its crude oil domestically in the third quarter of 2024, up from less than 75% in the previous quarter, according to a Bloomberg report.
This strategic shift follows the federal government’s recent decision to allow the refinery to purchase crude oil in Naira. The move is designed to alleviate pressure on the country’s foreign exchange reserves and streamline transactions for both the government and the refinery.
The CEO of the Dangote Refinery, Aliko Dangote had expressed ongoing frustrations over the inability of his petrochemical plants to secure crude oil from the Nigerian National Petroleum Corporation and international oil companies operating within Nigeria.
Due to these supply challenges, the refinery has been compelled to source a significant portion of its feedstock from the United States and Brazil to meet its production demands.
This reliance on imported crude has posed challenges for the refinery, despite its strategic location in Nigeria, one of the world’s major oil-producing nations.
At some point, one-third of its feedstocks were imported from the U.S., with Dangote insisting that the IOCs are attempting to scuttle the success of the refinery.
Meanwhile, in a recent development, the Dangote Refinery is scaling back its imports of crude oil from the United States, with plans to source 80% of its crude needs locally.
A company spokesperson confirmed that the refinery will receive six shipments of crude oil from the NNPC next month, with each shipment averaging around one million barrels.
Additionally, two more shipments from Nigeria and two million barrels of WTI Midland crude are expected to arrive in September, according to tanker-tracking data.
This transition marks a pivotal moment for the refinery and could have broader implications for Nigeria’s energy sector, potentially boosting local oil producers and reducing the nation’s dependency on foreign crude imports.
Recall it was earlier reported that the federal government had announced that sales of crude oil to the Dangote Refinery in naira will commence on October 1, 2024.
