Connect with us

Hi, what are you looking for?

Business

Dangote Refinery to Buy 24 Million Barrels of Crude Oil from the US

Touchaheart – Dangote Refinery, a $20 billion refinery, has issued a term tender to purchase 2 million barrels of West Texas Intermediate Midland (WTI) crude oil per month for 12 months starting in July .

This amounts to 24 million barrels of crude oil in one year, highlighting the refinery’s significant demand for crude oil.

The purchase of US crude oil reflects Nigeria’s struggle to meet its own crude production, which remains below theoretical capacity.

Nigeria’s Crude Oil Production Challenges

Nigeria has not met its Organization of Petroleum Exporting Countries (OPEC) + quota for at least a year, with crude theft, aging oil pipelines, low investment, and divestments from oil majors contributing to declining production.

The nation pumped about 1.45 million barrels a day of crude and liquids in April, still far below its estimated production capacity of 2.6 million barrels a day.

READ MORE: $20bn Dangote Refinery to import crude oil from United States

New Draft Rules for Domestic Refineries

To ensure local supply to the 650,000 barrel-a-day refinery, Nigeria’s upstream regulator, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), released new draft rules that will compel oil producers to sell crude to domestic refineries.

Producers are allowed to export crude only after meeting domestic supply obligations .

Dangote Refinery’s Capacity and Feedstock

The plant is currently running at about half capacity and is taking advantage of cheaper US oil imports for as much as a third of its feedstock.

Since the start of this year, it has received at least one supertanker carrying about 2 million barrels of WTI Midland each month .

Dangote Refinery’s purchase of 24 million barrels of US crude oil highlights Nigeria’s struggle to meet its own crude production and the refinery’s significant demand for crude oil.

The new draft rules for domestic refineries and the refinery’s willingness to tap cheaper supplies than it can find at home demonstrate its commitment to meeting its feedstock needs.

You May Also Like

Press Release

In his words, he said “Democracy is not about politics; Democracy literally means the power of the people.The strength of a nation lies in...

Sports

England’s recent defeat in a crucial pre-Euro 2024 match has sent shockwaves through the footballing world, prompting captain Harry Kane to label it as...

BREAKING NEWS

In a move that sent shockwaves through Nigeria’s political and law enforcement circles, former Lagos State Governor and influential political figure Bola Tinubu has...

News

TOUCHAHEART – The Nigeria Labour Congress (NLC) has vowed to reject any minimum wage proposal below ₦250,000, describing such offers as “starvation wages”. The...