The Dangote Refinery in Lagos is in talks with Libya to import crude oil for its 650,000 barrels-per-day (bpd) plant, aiming to boost production. Devakumar Edwin, Vice President of Dangote Industry Limited (DIL), shared this update with Reuters on Sunday.
Edwin also revealed that the refinery will seek crude supplies from Angola, as the Nigerian National Petroleum Corporation (NNPC) Limited has been unable to meet the demand of the 650,000 bpd refinery. Since beginning operations in January, Dangote has struggled to secure enough crude from Nigeria despite the country being Africa’s largest oil producer. Issues such as theft, pipeline vandalism, and low investment have contributed to this shortfall. Consequently, Dangote has had to import crude from countries like Brazil and the United States.
“We are talking to Libya about importing crude. We will also talk to Angola and some other African countries,” Edwin said in a statement. He noted that international traders and oil companies are among the largest buyers of Dangote’s gasoil, much of which is being exported. The refinery’s oil trading arm manages supplies and sales with staff in London and Lagos. “The biggest off-takers are the two big traders Trafigura and Vitol, as well as BP and, to some extent, TotalEnergies. But all of them say they are taking it offshore,” Edwin added.
Controversy with Nigerian Oil Authorities
Recently, the refinery has been involved in a dispute with Nigerian oil regulatory bodies, particularly the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Farouk Ahmed, head of NMDPRA, accused Dangote and other local refineries of producing diesel with high sulfur content, up to 650 parts per million (ppm). Ahmed also suggested that Aliko Dangote, CEO of the refinery, might be attempting to monopolize the industry, which he argued could threaten the country’s energy security.
In response, Dangote invited regulatory authorities to inspect his plant in Lagos to verify the quality of their products, asserting that they have the best quality products in Nigeria. Furthermore, Dangote halted his plans to invest in Nigeria’s steel industry to avoid accusations of monopoly. He stated that other wealthy Nigerians could invest in the steel business, emphasizing that the board of his multi-sector firm advised him to stay out of the industry.
What You Should Know
The Dangote Refinery in the Lekki Free Zone near Lagos is one of the largest oil refineries globally. Initiated by the Dangote Group, it aims to meet Nigeria’s domestic demand for refined petroleum products and reduce dependence on imported fuel. With a projected capacity of 650,000 barrels per day, the refinery is expected to transform Nigeria from a fuel importer to a net exporter of refined petroleum products.
Construction of the refinery began in 2016, involving complex engineering and massive investments. It includes a petrochemical and fertilizer plants, making it a significant industrial hub in the region. The Dangote Refinery’s impact extends beyond the oil sector, with expectations to create thousands of jobs and stimulate economic growth in Nigeria. Producing a surplus of refined products aims to stabilize fuel prices and ensure a steady supply for local markets, contributing to energy security.
