The Dangote Oil Refinery, located in Lagos, Nigeria, is poised to make significant strides in its operations by seeking to procure millions of barrels of US crude oil over the next year. This move comes as the refinery gears up to increase its processing rates, showcasing the challenges that Nigeria, Africa’s largest oil producer, faces in boosting its own crude production.
A document obtained by Bloomberg reveals that the Dangote plant, spearheaded by Africa’s wealthiest individual, Aliko Dangote, has initiated a term tender for the acquisition of 2 million barrels per month of West Texas Intermediate Midland crude. This tender spans a duration of 12 months, commencing in July. The deadline for the tender submission is set for May 21.
This significant procurement initiative underscores the pivotal role that the Dangote refinery is poised to play in the global crude and fuel trading landscape. Once fully operational, the refinery is expected to emerge as the largest fuel-making facility in Africa, further amplifying its impact on the global oil market.
The decision to source US crude highlights the ongoing challenges faced by Nigerian crudes in competing against American supply, as noted by a trader familiar with West African barrels.
Despite repeated attempts to seek clarification, an official at Dangote is yet to respond to requests for comment on the matter.
The Dangote refinery project represents a monumental endeavor, with a projected capacity of 650,000 barrels per day (BPD) once fully operational. Situated in the Lekki Free Zone near Lagos, Nigeria, it is slated to become the continent’s largest oil refinery and the world’s largest single-train facility.
This development aligns with the Nigerian government’s aspirations to revitalize the country’s refining sector. In March, the Minister of State Petroleum Resources (Oil), Heineken Lokpobiri, expressed concerns about the availability of crude oil for local refineries, including Dangote, emphasizing the need for increased production to support domestic refining operations.
As Nigeria navigates its oil production challenges, the Dangote Oil Refinery’s procurement of US crude underscores its strategic approach to ensuring the smooth operation and success of this landmark project.