THE Dangote Refinery and Petrochemical Company are reportedly sourcing crude oil from multiple international suppliers, including Angola, to ramp up production.
The decision to source from international suppliers follows ongoing discussions with the Nigerian National Petroleum Company Limited (NNPCL) regarding the naira-for-crude deal, which is set to expire this month
According to a report by Bloomberg on Tuesday, March 11, Dangote refinery has been securing feedstock from across the world in addition to its domestic deliveries. As the 650,000 barrels per day (bpd) refinery gradually increases its output, it is reshaping the region’s import and export landscape.
“It has taken delivery of more than three million barrels of American crude since the start of the month.
“The refinery has also made purchases closer home, importing a shipment of Angola’s Pazflor grade and a cargo of Algeria’s Saharan Blend from Glencore Plc in recent weeks,” it stated.
The Dangote Refinery’s increased sourcing of crude oil from foreign suppliers comes amid ongoing discussions regarding the NNPCL’s naira-for-crude deal with local refineries, which is yet to be finalised.
The deal ends this month, but the NNPCL said it had initiated a conversation with the Dangote refinery for possible renewal.
In a statement on Monday, March 10, to refute reports that it had suspended the naira-for-crude deal, the state-owned oil company said it was in talks with Dangote refinery to extend the contract.
As the 650,000 barrels per day (bpd) refinery gradually increases its output, it is reshaping the region’s import and export landscape.
It explained that the crude oil sale agreement in naira was structured as a six-month contract and is set to expire at the end of March 2025.
According to the NNPCL, it has supplied over 48 million barrels of crude oil to the Dangote Refinery since October 2024 under this arrangement.
In total, the NNPCL stated that it has provided over 84 million barrels of crude oil to the Dangote Refinery since the facility began operations in 2023.
Despite these developments, the Dangote Refinery has disclosed plans to increase its production capacity this month.
The Vice President of Dangote Industries Limited (DIL), Edwin Devakumar, revealed in February that the refinery could begin operating at full capacity within 30 days.
At the time, he noted that the refinery was operating around 85 per cent of its capacity.
Earlier, Devakumar had said the refinery was not getting delivery of the 385,000 barrels per day agreed to be supplied to the refinery by the NNPCL.
As the talk over the naira-for-crude oil swap deal unfolds, analysts have warned that a suspension of the deal could trigger importation and high fuel costs.
An oil governance expert, Henry Ademola Adigun told The ICIR that the termination of the agreement would push Nigerian refineries, including the Dangote refiner, to source crude oil from international suppliers, paying in dollars instead of naira.
He said, “Crude-for-naira swap wasn’t a transparent deal between Dangote and the Nigeria National Petroleum Company Limited. The market is experiencing some form of dynamism and the marketers are incurring losses currently.
“Let me tell you the landing cost is now between N845-N850 and many of them are still selling at a price close to that. Maybe from henceforth, we will get a clearer picture of what the price is.”
While the Dangote refinery sources more crude oil from foreign suppliers, Bloomberg noted that the mega refinery runs mostly on local feedstock, as it took in more than ten million barrels of Nigerian crude last month alone.