THE Dangote Petroleum Refinery has stated it expects to stop importing crude oil by the end of the year and to rely entirely on Nigerian crude.
Vice President at Dangote Industries Limited, Devakumar Edwin, told Bloomberg.
The move is expected to replace hundreds of thousands of barrels a day of imported crude oil in Nigeria.
“We expect some of the long-term contracts will expire. Personally, and as a company, we expect that before the end of the year, we can transition 100% to local crude,” Edwin was quoted as saying.
He said the refinery is currently processing 550,000 barrels of crude daily.
In June, the refinery received about half of its crude from local producers who will be able to sell more to the facility as their foreign supply obligations end.
Edwin said 53 per cent of its crude supply was sourced from domestic producers and 47 per cent from the United States last month.
The gradual ramp-up of the 650,000 barrel-a-day refinery sited in Lagos State has already made Nigeria a net exporter of petroleum products.
It has, however, been sourcing large quantities of overseas crude after domestic traders, including the Nigerian National Petroleum Company Limited (NNPCL), failed to meet demand.
Since the Dangote Refinery started production, the company has bought crude from Brazil, Angola, Ghana, and Equatorial Guinea, according to Edwin.
He believes that improved relations between the refinery, local oil traders, and the government will result in a steady supply of Nigerian crude as the company plans to end crude importation.
In July, the Dangote Refinery is scheduled to take five cargoes from Nigeria’s state oil company, NNPCL, the same amount it is due to take up in August, Bloomberg stated.
Each shipment is estimated to hold almost a million barrels of crude.
The ICIR reports that Nigeria, a member of the Organisation of Petroleum Exporting Countries (OPEC), has seen a withdrawal of oil majors from onshore and shallow water fields that have been taken over by local companies with fewer resources.
Amid the supply contracts with foreign companies, crude theft and attacks on pipelines in the Niger Delta have curbed production reducing the availability of oil at home.
OPEC monthly reports show that Nigeria has hardly been meeting its 1.5 million barrels per day (bpd) quota.
Its latest report shows that Nigeria’s average daily crude oil output fell to 1,453 million bpd in May, The ICIR reported.