The Dangote Refinery has increased its crude oil imports from international suppliers following the end of the Naira-for-Crude deal with the Nigerian government.
According to reports from Bloomberg, the 650,000 barrels per day (bpd) refinery has recently sourced crude from the United States, Angola, and Algeria, among others. Since the beginning of March, the refinery has received over three million barrels of American crude, in addition to shipments from Angola and Algeria.
Refinery Ramping Up Production
Industry experts at Energy Aspects Ltd. revealed that crude oil deliveries to Dangote Refinery have averaged 450,000 bpd over the past two weeks, up from 380,000 bpd in January and February.
“Our satellite tracking shows a drop in crude oil stocks at the refinery, meaning production is increasing,” said Randy Hurburun, a senior refinery analyst.
Once fully operational, Dangote Refinery will process 650,000 barrels per day, making it Africa’s largest refinery and surpassing any single refinery in Europe. The facility has already helped reduce Nigeria’s crude surplus and cut down fuel imports.
End of the Naira-for-Crude Agreement
Despite expanding its international crude sourcing, Dangote Refinery still depends heavily on Nigerian crude. Last month alone, it received over 10 million barrels of local feedstock, based on tanker-tracking data compiled by Bloomberg.
Since the crude supply agreement between Dangote and the Nigerian National Petroleum Company Limited (NNPCL) began in October, the refinery has received a total of 48 million barrels from NNPCL.
However, there is uncertainty about whether these supplies were paid for in naira or dollars. Earlier reports suggested that the Naira-for-Crude arrangement was not consistently implemented, leading to the deal’s expiration.
The first phase of the agreement has now ended, but NNPCL is reportedly in talks with Dangote Refinery to extend the deal.
What’s Next? Price and Market Competition
Analysts believe Dangote’s future crude sourcing will depend on price and availability.
“WTI crude from the U.S. will remain attractive because it’s light, sweet, and competitively priced compared to West African grades,” said Ronan Hodgson, an analyst at FGE.
With more options now available, Dangote Refinery may also consider crude from Libya, the North Sea, and the Mediterranean, depending on market conditions.
For now, the refinery is expanding its crude supply base, ensuring steady production while negotiating future deals with NNPCL.
