Dangote Resumes US Crude Oil Imports After Three-Month Hiatus

Dangote Group restarts crude oil purchases from the US, marking the end of a three-month break, as its refinery operations gear up.

Dangote Petroleum Refinery has resumed buying crude oil from the United States as part of its efforts to increase oil production and improve refining capacity.

The recent acquisition follows a three-month pause in buying crude from overseas, as efforts were directed towards utilizing domestic supply.

A Wednesday report by Bloomberg indicated that a shipment carrying two million barrels of WTI Midland crude from Chevron Corp is scheduled for delivery to the refinery next month.

The recent development could suggest that the naira-for-crude initiative by the Federal Government has possibly stalled, or it might indicate that the refinery is not receiving sufficient crude supply from the Nigerian National Petroleum Company Limited.

The Dangote Refinery received its first shipment of U.S. oil following a three-month break, as the facility continues to increase production levels.

According to the report, the plant acquired approximately two million barrels of WTI Midland crude from Chevron Corp.

According to tanker fixtures reviewed by Bloomberg, Chevron has reserved the supertanker Azure Nova for loading crude from the US Gulf around December 5th for delivery to Dangote.

Earlier this year, Dangote usually received one or two supertankers of U.S. crude each month in addition to domestic supplies.

These imports decreased in August after an agreement with the federal government was reached, allowing NNPCL to supply crude oil to the refinery using naira instead of dollars.

The agreement specified that the refinery would purchase up to 400,000 barrels per day of Nigerian crude oil, with payments made in local currency.

Dangote is increasingly influencing the US and European oil markets by steadily increasing its acquisition of crude from Nigeria and the United States.

The plant’s demand for those barrels intensifies the competition over oil faced by traditional buyers in Europe.

The report noted that the reasons behind the resurgence of US imports are still uncertain. However, a recent analysis from Sparta Commodities earlier this week indicates that reduced shipping costs might have recently made US oil more cost-effective in Europe.

On Monday, it was reported that the refinery is aiming to raise billions of dollars in order to import crude oil and boost its production.

The report indicated that Aliko Dangote, the Chairman of the Dangote Group, was actively negotiating with commercial lenders, development banks, oil traders, and other industry stakeholders to secure funding for crude oil supplies aimed at converting them into refined products.

The report indicates that the refinery requires at least 300,000 barrels per day to increase its crude supply and achieve full operating capacity.

On Tuesday, the plant started shipping refined petroleum products to West African countries, signaling to traders that the mega-refinery’s operations might soon disrupt regional fuel markets.

In a separate announcement on Wednesday, the Dangote Group claimed it accomplished what international oil companies could not by constructing a refinery in Nigeria.

Devakumar Edwin, the Vice President of Oil and Gas at Dangote Industries Limited, made this statement while welcoming members of the Senate Committee on Trade and Investment to the refinery complex in Lekki, Lagos State.

During the visit led by committee Chairman Sadiq Umar, Edwin informed the senators that the Dangote Group accomplished something that Shell, Chevron, or ExxonMobil has never achieved anywhere in the world.

He stated that a Nigerian company accepted the challenge to construct the world’s largest single-train refinery.

He mentioned that approximately six companies worldwide were capable of doing the same.

“In this instance, a Nigerian company undertook a challenge that major corporations like Shell, Chevron, or ExxonMobil have never pursued anywhere in the world. Dangote Projects Limited rose to the occasion and completed construction of the refinery on schedule. This facility is now recognized as the world’s largest single-train refinery,” he stated.

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The Chairman of the Senate Committee on Trade and Investment, Umar, expressed his assurance that the National Assembly would support the refinery.

He described the $20 billion project as a national asset that needs protection.

As legislators, we fully recognize and appreciate your efforts here and understand their significance for the nation. You can trust that we are committed to doing everything within our power to support your success, as it ultimately contributes to Nigeria’s success.

The investment we’ve observed here benefits both the country and the world, not just Dangote himself. It’s our duty to figure out how we can support and encourage him.

“I am confident you can observe numerous measures the president has taken to support him in making the country better,” the senator stated.

Situated in the Lekki Free Zone in Lagos, the facility with a capacity of 650,000 began production this January. It started distributing diesel and aviation fuel to the local market while also exporting to other countries.

In September, the facility began producing premium motor spirits following weeks of disputes with international oil companies regarding crude supply.

Aliko Dangote, President of the Dangote Group, has consistently accused international oil companies (IOCs) of declining to sell crude to him, alleging that this was an attempt to undermine the refinery.

Following presidential interventions, the refinery began receiving crude oil in naira to enhance the local petrol supply priced in naira.

It was discovered that the refinery could soon begin exporting petrol to other West African countries.