NIGERIA’S Dangote Refinery, the largest in Africa, is set to achieve a production level of 550,000 barrels per day (bpd) this year, representing 85 percent of its total capacity. However, the refinery is grappling with insufficient domestic crude supplies, necessitating an increase in imports, said CEO Aliko Dangote on Saturday.
Chief Executive Aliko Dangote explained that the 650,000-bpd capacity refinery, located on the outskirts of Lagos, has only received five crude cargoes from the Nigerian National Petroleum Corporation (NNPC) since commencing operations earlier this year. This is significantly below the expected 15
To address this shortfall, Dangote disclosed that the refinery has resorted to importing crude from international sources. ‘We went ahead and bought some Brazilian crude, we also got US crude. Anytime we go to IOCs (international oil companies), they say go to brokers,’ Dangote stated during a facility tour. ng a $4 mark-up per barrel of crude.
Previously, NNPC had committed to supplying the refinery with 300,000 bpd, but it is currently struggling with low production levels. Additionally, some of its crude output is being exchanged for gasoline imports, further complicating the supply situation.
The Dangote Refinery, which began production in January after several years of delays, was constructed at a cost of $20bn. Despite the challenges, the refinery’s upcoming production milestone marks a significant achievement for Nigeria’s oil industry.
As the refinery ramps up its operations, it highlights the ongoing challenges within Nigeria’s oil sector, including domestic production issues and the complexities of international crude procurement. The success of the Dangote Refinery is crucial for Nigeria’s economic growth and energy security, particularly in reducing reliance on imported petroleum products.
The facility’s performance will be closely monitored as it approaches its target output, with stakeholders hopeful that domestic crude supplies will improve to support its operations fully
