Dangote Refinery Plans to Import Crude Oil from Libya

The Dangote Refinery in Lagos is in talks with Libya about importing crude oil for its 650,000 barrel-per-day plant as it expands production.

This information was provided to Reuters on Sunday by Devakumar Edwin, the vice president of Dangote Industry Limited (DIL).

The Vice President further stated that because the Nigerian National Petroleum Corporation (NNPC) Limited is unable to supply the refinery’s 650,000 barrels per day, the refinery will be looking to purchase oil from Angola.

Since starting a business in January, Dangote has had trouble obtaining a sufficient supply of crude oil in Nigeria.

Even though it produces the most oil in Africa, the nation has issues like low investment, theft, and pipeline vandalism.   

Dangote has thus had to buy petroleum from countries as far away as Brazil and the US.

“We are discussing the import of crude with Libya.”

In a statement, Edwin stated, “We will talk to Angola as well as some other countries in Africa.”

He said that the main consumers of Dangote’s gasoil, which was mostly being exported, were foreign traders and oil corporations.

Edwin pointed out that Dangote’s oil trading division was running, employing people in Lagos and London to handle supply and close deals.

“The two major traders, Trafigura and Vitol, as well as BP and, to a lesser extent, TotalEnergies, are the largest offtakers. But they all say they’re taking it offshore,” Edwin added. 

Controversy with Nigerian Oil Authorities

The refinery and Nigeria’s oil regulatory agencies, namely the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), have been embroiled in a legal battle in recent days.

Farouk Ahmed, the head of NMDPRA, charged that the refinery and other nearby refineries had sulphur contents as high as 650 parts per million (ppm).

Additionally, Ahmed asserted that Aliko Dangote, the refinery’s CEO, might be trying to monopolize the sector, a move he felt would be dangerous for the nation’s energy security.

Dangote responded by urging the regulatory bodies to come to his facility in Lagos and investigate the items’ composition, claiming that theirs is the highest-quality product line in Nigeria.  

In order to avoid being accused of having a monopoly, the billionaire also decided to scrap his ambitions to invest in Nigeria’s steel sector.

It’s crucial to remember that the steel sector, which has been dormant for many years, still lacks development and funding.

Dangote stated that other affluent Nigerians may enter the steel industry, stressing that the board of his multi-sector company had encouraged him not to.

What to note

One of the biggest oil refineries in the world is the Dangote Refinery, which is situated in the Lekki Free Zone close to Lagos, Nigeria. It was started by the Dangote Group to lower Nigeria’s reliance on imported fuel by satisfying its domestic demand for refined petroleum products.   

With a planned daily capacity of 650,000 barrels, the refinery is expected to change Nigeria’s position from a net importer of refined petroleum products to one of exporter.

The project required sophisticated engineering and significant financial outlays, and construction on the refinery started in 2016. The refinery is a major industrial hub in the area, housing both a fertilizer and petrochemical complex.

The Dangote Refinery has an effect outside of the oil industry. It is projected to boost Nigeria’s economy and provide thousands of new employment. It seeks to promote energy security by generating an excess of refined products that will stabilize fuel prices and guarantee a consistent supply for regional markets.