The Dangote Petroleum Refinery is looking to import additional crude oil due to insufficient supply from the Nigerian National Petroleum Company Limited for fuel production at its $20 billion Lekki facility.
Officials at the refinery reported that production has increased to 500,000 barrels per day and aims to reach 650,000 bpd by June this year.
Sources, speaking anonymously due to a lack of authorization to address the media, confirmed that the naira-for-crude deal, as directed by President Bola Tinubu last year, remains in place.
However, they emphasized that the refinery will need to import additional crude oil to meet its production target.
The NNPC is reportedly struggling to supply the Dangote refinery with the required 350,000bpd from the 450,000 bpd of crude designated for Nigeria’s domestic consumption.
With the refinery’s current production capacity at 500,000 bpd, officials have stated that it will be necessary to source additional crude from outside Nigeria to meet the target.
According to officials, the issue is not that the NNPC is unable to supply crude, but rather that the daily feedstock required by the refinery cannot be fully provided by the state-owned oil company alone.
When asked if the refinery plans to import more crude now that the NNPC refineries are coming back online, one of the reliable sources at the plant responded “Of course!
“This is a 650,000 barrels per day capacity refinery. And as you know, we are also ramping up. You see, maybe by the middle of the year, we will hit 650,000. Do you know what 650,000bpd means?“
Another source confirmed this, adding “It is not that anybody is saying NNPC cannot do it. No! But you look at what we have. We are not a 200,000bpd refinery. We are talking about 650,000 barrels.
“Currently, we are at 500,000bpd; we will ramp to 650,000 by midyear. You know what it means? So, it is a normal process to source crude oil anywhere it is available.”
As Nigeria’s refining capacity grows, the 450,000 barrels of crude oil allocated for local refineries is no longer sufficient.
The Nigerian Upstream Petroleum Regulatory Commission has revealed that the Dangote refinery, the Port Harcourt refinery, and six other refineries will require 770,500 barrels of crude per day for fuel production.
According to data sourced from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the country’s refining capacity is now 974,500 barrels per day, considering only the operational refineries.
Last year, President Bola Tinubu instructed the NNPC to sell crude oil to local refineries in naira, as part of efforts to support domestic refining operations.
“The Federal Executive Council has approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as a pilot. The exchange rate will be fixed for the duration of this transaction,” Tinubu’s spokesman, Bayo Onanuga stated last year.
In October, the committee overseeing the naira-for-crude deal began selling crude oil in naira exclusively to the Dangote refinery, stating that it would only supply petrol-producing refineries under the arrangement.
