The Dangote Petroleum Refinery, Nigeria’s largest, is taking the unusual step of reselling crude oil cargoes from the United States and Nigeria due to technical challenges at the plant.
Despite commencing production in January 2024, the refinery is facing operational issues, particularly with its crude distillation unit (CDU).
While a Dangote executive maintains that the CDU is functional, the refinery is reselling rare cargoes, including Nigerian Escravos and Forcados grades, as well as U.S. WTI Midland crude.
The refinery aims to become the largest in Africa and Europe, transforming Nigeria into a fuel exporter, but these technical hurdles may hinder its progress.
Constructed at a cost of $20billion by Africa’s wealthiest individual, Aliko Dangote, the 650,000-barrel-per-day facility represents a significant investment in Nigeria’s oil and gas sector.
Dangote’s ambition is to eliminate Nigeria’s dependency on imported fuel, an ongoing issue despite the nation being Africa’s top oil producer.
According to Oli Price.Com citing Reuters sources, this situation arises amid other significant moves by the Dangote Group, which plans to list its refinery and a fertilizer subsidiary on the Nigerian stock exchange by early 2025.
This public listing strategy hopes to alleviate foreign exchange pressures on the Nigerian economy.
The refinery has been importing considerable volumes of U.S. crude, with more than 16 million barrels of West Texas Intermediate crude purchased in 2024 alone. This trend is expected to continue, with increased imports slated for the coming months.
While the plan is for the refinery to meet Nigeria’s entire demand for refined petroleum products and generate a surplus for export, the current technical issues pose a significant hurdle.
The Nigerian Upstream Petroleum Regulatory Commission reached an agreement with oil producers earlier this month to supply crude oil to domestic refineries at market prices, ending a lengthy supply dispute.
Hyperlink – https://oilprice.com/Latest-Energy-News/World-News/Nigerias-Dangote-Refinery-Reselling-Imported-Crude-Oil.html
Source link : https://saharareporters.com/2024/07/26/nigerias-dangote-refinery-begins-reselling-imported-crude-oil-amid-domestic-crisis
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Publish date : 2024-07-26 21:41:18
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