Dangote Refutes Allegations of Crude Oil Resale

Dangote Refinery refutes crude resale claims...

Dangote Oil Refinery denies allegations of reselling crude oil, blames international oil companies for sabotage and inflating costs, and faces challenges in procuring local crude oil amidst supply shortages.

The Dangote Oil Refinery has categorically denied allegations that it was reselling crude oil shipments purchased from the US and Nigeria to other traders. Tony Chiejina, spokesperson for the Dangote Group, dismissed the claims as “completely false” on Saturday, July 27.

An international media outlet had previously reported that the reselling was due to technical issues at the refinery, citing three trade sources familiar with the situation. However, Chiejina refuted this claim, stating that the refinery continues to source crude oil from Angola and Libya, and confirming that the crude distillation unit is in good working condition.

“Outright falsehood. We are sourcing more crude from Angola and Libya. Also, our crude distillation unit is functioning perfectly well. You may wish to visit the refinery even today or tomorrow,” he told our correspondent on Saturday.

In a subsequent statement issued on the same day, Saturday, July 27, Tony Chiejina, spokesperson for the Dangote Group, appealed to the public to disregard the false reports, suggesting that their sole purpose is to discredit and undermine the reputation of the Dangote Oil Refinery.

“Our attention has been drawn to a misleading report suggesting that our refinery's crude distillation unit (CDU) is experiencing issues and that we are reselling crude oil.

“We categorically deny these claims. The Dangote refinery is not authorized to sell crude oil purchased from Nigeria, and our CDU is fully operational and functioning optimally.

“We advise the public to disregard these false narratives, which are likely driven by interests opposed to the local refining of fuels,” he said.

The Dangote Oil Refinery, with a capacity of 650,000 barrels per day, commenced operations earlier this year but has since encountered challenges related to crude oil supply shortages.

According to sources, the refinery has been offering various crude grades for sale, including Nigerian Escravos and Forcados, as well as US WTI Midland, indicating a surplus of certain crude types amidst the reported shortages.

In a significant development, DVG Edwin, Vice President of Oil & Gas at Dangote Industries Limited, has made a startling allegation that international oil companies (IOCs) operating in Nigeria have been deliberately sabotaging Dangote's efforts to procure locally produced crude oil for its refining operations.

According to Edwin, the IOCs have been inflating the cost of local crude oil by $6 above the market price, effectively blocking Dangote's access to affordable domestic crude. This forces the refinery to resort to importing crude oil from distant countries like the United States, resulting in significantly higher costs and undermining the refinery's viability.

Edwin said, “It seems that the IOCS' objective is to ensure that our petroleum refinery fails. It is either they are deliberately asking for a ridiculous and humongous premium or they simply state that crude is not available.

“At some point, we paid $6 over and above the market price. This has forced us to reduce our output as well as import crude from countries as far as the US, increasing our cost of production.

“It appears that the objective of the IOCs is to ensure that Nigeria remains a country, which exports crude oil and imports refined petroleum products. They are keen on exporting the raw materials to their home countries, creating employment and wealth for their Product, and dumping the expensive refined products into Nigeria, thus making us dependent on imported products.”