The Dangote Oil Refining Co. has cast its gaze across the Atlantic in its quest for crude feedstock, issuing tenders to purchase a whopping 24 million barrels of black gold from American shores over the coming year.
Whispers from the industry grapevine indicate that this $20 billion behemoth, owned by the legendary Aliko Dangote, has set its sights on procuring 2 million barrels per month of that sweet West Texas Intermediate Midland nectar for a duration of 12 months commencing in the sultry days of July.
This ambitious move throws into stark relief the hurdles faced by Nigeria’s petroleum industry as it struggles to boost production levels plagued by aging infrastructure, rampant crude theft, and the ever-present scourge of pipeline sabotage.
Despite holding the mantle as Africa’s premier crude producer, the nation has found itself unable to meet its OPEC quota for over a year, with April’s output figures falling well short of estimated capacity.
Insiders suggest this thirst for foreign crude stems from Nigeria’s failure to ramp up its own production to quench the refinery’s voracious appetite, coupled with the allure of cheaper feedstock than can be sourced domestically. It also underscores the refinery’s future status as a titan striding the global crude and fuel trading arena.
In a bid to address the supply crunch, the Nigeria Upstream Petroleum Regulatory Commission has unveiled draft rules mandating that oil firms operating on its soil must prioritize sating the needs of domestic refineries before exporting their wares.
Under this proposed framework, the NUPRC would assume the role of intermediary between refiners and producers, facilitating sales through a willing-buyer, willing-seller model at its core.
While such a policy could potentially benefit the Dangote juggernaut by enabling it to tap local crude streams, the refinery has already been feasting on a steady diet of cheaper American imports, which currently account for up to a third of its feedstock consumption.
Industry whispers indicate that since the dawn of 2024, this half-capacity titan has been receiving a monthly shipment of around 2 million barrels of that coveted WTI Midland crude via supertanker.
As Nigeria grapples with resuscitating its flagging oil industry, the Dangote Refinery’s foreign crude shopping spree underscores the dire need for increased investment, infrastructure overhauls, and a renewed assault on the scourges of crude theft and pipeline sabotage plaguing the nation’s petroleum sector.