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Dangote Refinery in Lagos is poised to purchase millions of barrels of US crude over the next year as it ramps up processing rates, highlighting the difficulties Africa’s largest oil producer faces in increasing its own oil output. The refinery, built by Africa’s wealthiest individual, Alhaji Aliko Dangote, has issued a term tender seeking to buy two million barrels monthly of West Texas Intermediate (WTI) Midland crude for a duration of 12 months, starting in July, Bloomberg reported on Thursday.
According to Bloomberg, the tender is set to close on May 21.
In April, reports indicated that despite Nigeria’s status as a leading crude oil producer, the Dangote Petroleum Refinery, with a capacity of 650,000 barrels per day, is leveraging cost-effective oil imports from the US, which will constitute up to one-third of its feedstock as production begins.
A prior Bloomberg report on April 18 noted that the refinery had started shipping products while preparing two units to facilitate gasoline output. Analysts anticipate this will significantly impact the fuel market in Nigeria and the surrounding region.
Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at consultancy firm Wood Mackenzie, remarked, “Dangote is going to influence Atlantic Basin gasoline markets this summer and for the rest of the year.”
The strategic move to import US crude underscores the refinery’s role in addressing local fuel demands and stabilizing the regional fuel supply chain amidst fluctuating domestic oil production levels.
