The Dangote oil refinery in Nigeria has refuted the allegations that it is reselling cargoes of both Nigerian and American petroleum, calling them flatly false.
According to a story published over the weekend, which cited sources with knowledge of the situation, the 650,000 barrels-rated refinery, which is scheduled to start producing PMS in a few weeks, has offered for sale four distinct grades of crude.
After the announcement on Friday, the price of crude oil continued to drop. Brent crude fell as much as 2.5% near $80 per barrel, but by 1700 GMT on Friday, it had rebounded to above $81.
According to a Reuters article, three anonymous sources claimed that the reoffer was related to technical issues at the massive refinery and mentioned that among the grades being offered were cargoes of Nigerian Escravos and Forcados crude along with U.S. WTI Midland crude.
Dangote Group, however, refuted the accusation in a statement, stating that the refinery’s CDU was in excellent working order.
“Our attention has been drawn to a misleading report on our crude distillation unit and also that we are offering crude for re-sale,” stated Tony Chiejina, an executive with Dangote.
“This is completely incorrect because we are not permitted to sell any crude purchased from Nigeria! Also, our CDU is operational and in excellent shape. We recommend that you disregard these misleading tales propagated by individuals intent on bringing polluting fuels into the country.”
When it reaches full capacity, the refinery, which began operations in January, will be the biggest in both Africa and Europe. It has the potential to upend the extremely profitable petroleum trade between Europe and Africa, turning Nigeria into a fuel exporter.
Refineries are known to occasionally engage in such resales, although the Reuters piece makes no mention of them. The richest man in Africa, Aliko Dangote, spent $20 billion building the refinery, which can process 650,000 barrels of oil each day.
Despite Nigeria being the largest oil producer in Africa, Dangote wants to end the country’s dependence on gasoline imports.
