In a bid to address the challenge posed by domestic supplies, the Dangote refinery is in talks with Libya and Angola to secure crude oil supplies for its 650,000 barrels per day (bpd) facility.
This much was disclosed by Devakumar Edwin, a senior executive, who spoke to Reuters on Saturday evening.
The $20 billion refinery, built by Aliko Dangote on the outskirts of Lagos, is Africa’s largest and aims to reduce Nigeria’s reliance on imported fuels due to insufficient refining capacity.
Since commencing operations in January, Dangote has faced challenges in securing adequate crude supplies in Nigeria, despite the country being Africa’s largest oil producer.
Nigeria’s oil industry is grappling with issues such as theft, pipeline vandalism, and low investment.
As a result, Dangote has been forced to import crude from countries like Brazil and the United States, Reuters reports. According to Edwin, the company is engaged in discussions with Libya and Angola, among other African nations, to explore crude import opportunities. While Edwin did not provide further details on the talks, he mentioned that international traders and oil companies are among the primary purchasers of Dangote’s gasoil, with a significant portion being exported.
“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 to offshore,” Edwin said.
Traders and shipping data have shown that Dangote is increasing gasoil exports to West Africa, taking market share from European refiners.
Edwin said Dangote’s oil trading arm was operational, with staff in London and Lagos, to help manage supplies and sell products. Reuters first reported the planned trading arm in March.
Nigeria’s upstream regulator and Dangote have differing views on the sulphur content in Dangote’s gasoil.
The regulator claims the sulphur content exceeds the allowed limit of 200 parts per million (ppm), while Dangote asserts that the sulphur level has decreased over time.
According to Dangote, the sulphur content was higher when production began but has since dropped to 88 ppm and is expected to further reduce to 10 ppm by early August as production increases.
