Dangote Refinery Resumes Crude Oil Purchases from the US to Boost Output

In its effort to enhance production capacity and output, Dangote Refinery has resumed importing crude oil from the United States. After a three-month hiatus, the refinery has acquired a shipment of two million barrels of WTI Midland crude oil from Chevron Corporation.

According to a Bloomberg report, the shipment is expected to arrive in December. Chevron has booked the supertanker Azure Nova to transport the oil from the US Gulf to the refinery, with delivery scheduled around December 5.

This marks a shift after three months of relying on domestic crude supplies, potentially signaling challenges in sourcing adequate crude from Nigerian National Petroleum Company Limited (NNPCL) or changes in the naira-for-crude arrangement with the federal government.

The Nigerian government previously announced a naira-for-crude supply agreement with Dangote Refinery on October 5, 2024. However, recent comments by economist Kelvin Emmanuel suggest that the refinery continues to purchase crude oil from the Nigerian government in US dollars, raising questions about the status of the earlier agreement.

Dangote Refinery’s decision to resume international crude purchases may reflect efforts to optimize operations and sustain production targets. The move comes as Nigeria seeks to expand its refining capacity and reduce reliance on imported refined petroleum products.

As the largest refinery in Africa, Dangote Refinery is positioned to play a pivotal role in transforming Nigeria’s energy sector. Experts will closely monitor these developments for their implications on domestic supply chains and the broader economy.