The $20 billion Dangote Petroleum Refinery, as affirmed by Alhaji Aliko Dangote, was purposefully constructed to utilize Nigerian crude and enhance its value within the nation.
Addressing queries about the refinery’s operations, Dangote emphasized its commitment to Nigerian crude while acknowledging past refining of oil grades from various regions including Europe and the United States.
The refinery, considered one of the largest globally, has played a role in the management of crude flows by retaining Nigerian cargoes and importing US WTI Midland, a similar light sweet grade, thus influencing the crude market.
Referring to the refinery’s primary crude selection, a West African trader mentioned the significant use of WTI and lighter Nigerian crude, emphasizing the impact on the market.
Reports indicate that WTI Midland crude has secured a notable portion of the refinery’s supplies, with long-term contracts in place for consistent delivery and competitive pricing.
The Dangote refinery’s influence extends to various markets, particularly in Europe, a major consumer of Nigerian crude.
Detailing the composition of delivered crude, the company highlighted US grade deliveries amounting to 30% of total crude supplied to the refinery through numerous cargoes.
In addition to Nigerian crude, the facility is looking to diversify its feedstock sources with imports from Libya, Angola, and Brazil.
The refining expert Rasool Barouni from S&P Global Commodity Insights affirmed the refinery’s capability to process various light and medium crude grades, including options beyond Nigerian crude.
Nigeria, the largest oil producer in sub-Saharan Africa, has historically focused on crude export due to limited refining capacity, necessitating substantial fuel imports for local consumption.
According to OPEC reports, Dangote Refinery and Petrochemicals’ operations are anticipated to impact Europe’s oil industry, particularly in the gasoil market.
Experts foresee a positive economic impact on Nigeria as the refinery’s diesel and jet fuel supplies are set to disrupt the European oil and gas industry.
Analysts predict that the full activation of the $20 billion Dangote refinery will significantly alter international crude trading flows, a process already initiated since its commencement in January.
Furthermore, regarding crude supplies, the refinery reiterated its stance emphasizing the need for effective domestic crude supply management to meet operational requirements.
The refinery clarified misconceptions about crude supply sources, emphasizing the importance of enforcing domestic crude supply obligations to facilitate operational efficiency and cost-effectiveness.
Continuous efforts are being made to ensure efficient management of crude supplies in line with regulatory requirements, emphasizing the refinery’s commitment to contributing to the growth of Nigeria’s oil and gas sector.