The Dangote Petroleum Refinery has resumed purchasing crude oil from the United States after a three-month pause during which it relied on domestic supply. This new shipment, which consists of two million barrels of WTI Midland crude from Chevron Corp, is expected to arrive at the refinery next month, according to a report from Bloomberg.
This move raises questions about the status of the Nigerian government’s naira-for-crude initiative, suggesting it may have encountered setbacks or that the refinery is not receiving sufficient crude supply from the Nigerian National Petroleum Company Limited (NNPCL). The purchase marks Dangote’s first US oil shipment after the three-month hiatus, continuing its efforts to ramp up production.
Chevron has booked the supertanker Azure Nova to load crude from the US Gulf around December 5, bound for Dangote, according to shipping records. Earlier this year, Dangote was importing one or two supertankers of US crude every month, alongside domestic oil, but these imports were reduced in August following an agreement with the government for NNPCL to supply crude in naira, rather than dollars. The agreement allowed the refinery to receive up to 400,000 barrels per day of Nigerian crude paid for in local currency.
Dangote has steadily increased its involvement in both US and European oil markets, gradually raising its purchases from Nigeria and the US. However, this increased demand is now competing with traditional buyers in Europe. Reasons for the return to US imports remain unclear, although some reports suggest that lower shipping costs may have made US oil more competitive in Europe recently.
In addition to these developments, Dangote is reportedly seeking billions of dollars to fund further crude imports and enhance production capacity. The refinery requires at least 300,000 barrels per day to reach its full capacity. Additionally, Dangote has started shipping refined petroleum products to West African countries, signaling the potential for the refinery to significantly impact regional fuel markets soon.
In a separate development, Dangote Group's Vice President of Oil and Gas, Devakumar Edwin, emphasized that the company had achieved what no international oil company had done by building the world's largest single-train refinery in Nigeria. Edwin made this statement while hosting members of the Senate Committee on Trade and Investment at the refinery in Lekki, Lagos. He noted that Dangote Group had taken on a challenge that even giants like Shell, Chevron, and ExxonMobil had not attempted, constructing the refinery on time.
Senate Committee Chairman Sadiq Umar assured the refinery of the National Assembly’s full support, emphasizing that the $20 billion project is a national asset that must be safeguarded. Umar expressed the committee's commitment to ensuring that the project succeeds for the benefit of Nigeria and the wider global community.
The Dangote Refinery, with a daily capacity of 650,000 barrels, began production in January, initially supplying diesel and aviation fuel to the local market while exporting to other countries. In September, the facility began producing premium motor spirits, following a series of disputes with international oil companies (IOCs) over crude supply. After presidential intervention, the refinery started receiving crude oil in naira to support local petrol supply. There are also plans to export petrol to other West African nations in the near future.
