Dangote Refinery to Run on 400,000 bpd Nigerian Crude Oil

Dangote Refinery Gets 400k bpd Nigerian Crude

Bloomberg data reveals that Dangote Petroleum Refinery's scheduled intake of Nigerian crude for October and November...

Nigeria's economic revolution begins: Naira-based crude oil sales commence. Get insights into the policy's potential effects on growth, inflation & exchange rates.

Nigeria's Dangote Petroleum Refinery is set to receive a significant supply of local crude oil over the next two months. According to a Bloomberg report, the refinery will take delivery of approximately 24 million barrels of Nigerian crude in October and November, totaling around 400,000 barrels per day.

The 650,000 bpd refinery is expected to receive 13 to 14 shipments from Nigeria's monthly program of about 50 cargoes. This increased reliance on local feedstock underscores Dangote's commitment to utilizing domestic resources.

However, some deliveries may be delayed. October's schedule includes two cargoes initially slated for September but postponed. This uncertainty may impact the refinery's overall supply chain.

Key Highlights:

• Dangote Petroleum Refinery to receive 24 million barrels of Nigerian crude in Oct-Nov
• 400,000 bpd supply over two months
• 13-14 shipments from Nigeria's monthly program of 50 cargoes
• Potential delays in some deliveries due to postponed September cargoes.

Bloomberg data reveals that Dangote Petroleum Refinery's scheduled intake of Nigerian crude for October and November – 400,000 bpd – marks a substantial increase from its average consumption of 255,000 bpd during the first half of the year.

The Dangote refinery has shifted its focus away from US crude, significantly reducing its purchases, according to traders who spoke with Bloomberg. This move comes after the Federal Executive Council (FEC) approved a proposal by Tinubu on July 29, directing the Nigerian National Petroleum Company (NNPC) Limited to sell crude oil to the Dangote refinery and other refineries in naira.

Instead, the refinery is turning to local sources, with allocations suggesting it will receive up to 400,000 barrels per day of Nigerian crude over the next two months. This increased reliance on domestic supply is expected to transform the region's import and export markets, solidifying Dangote's position as Africa's largest refinery.

Key Developments:

Reduced US Crude Imports: Dangote refinery cuts back on US crude purchases

Local Supply Boost: 400,000 barrels per day of Nigerian crude allocated for next two months

Naira-Based Transactions: FEC approves crude oil sales to Dangote refinery and others in naira

This strategic shift is likely to have far-reaching implications for the regional oil market, and it will be interesting to see how this plays out in the coming months.

The Nigerian government's naira-based crude oil sales to Dangote refinery officially kicked off on October 1, as planned. This significant move is part of the government's efforts to support the refinery's operations and boost local production.

According to Eche Idoko, publicity secretary of Crude Oil Refinery-owners Association of Nigeria (CORAN), the sales would initially focus on refineries producing petrol. This strategic approach ensures that the country's fuel needs are met efficiently.

The Nigerian Ports Authority (NPA) also confirmed its role in facilitating the smooth sale of crude oil in naira to the Dangote refinery, starting October 3. As the coordinating body, NPA will oversee service provision from all stakeholders, ensuring a seamless transaction process.

Additional Key Developments:

Naira-Based Sales Commence: Crude oil sales to Dangote refinery began on October 1.

Initial Focus on Petrol Production: Sales prioritize refineries producing petrol, as announced by CORAN 

NPA's Coordinating Role: Nigerian Ports Authority oversees service provision for smooth transactions.

Nigeria took a significant step forward on October 5, announcing the official commencement of crude oil and refined petroleum products sales in Naira! This milestone move, directed by the Federal Executive Council (FEC), began on October 1, 2024.

According to the Honourable Minister of Finance and Coordinating Minister of the Economy, Wale Edun, this strategic initiative is expected to have a lasting impact on Nigeria's economy, enhancing growth, stability, and self-sufficiency. The country's decision to sell crude oil to Dangote Petroleum Refinery and other refineries in Naira is a bold step towards success in the years to come.

Additional Key Highlights:

Commencement Date: October 1, 2024

Sales Initiative: Crude oil and refined petroleum products in Naira

Expected Impact: Enhanced economic growth, stability, and self-sufficiency

This development marks a significant shift in Nigeria's economic strategy, and it will be interesting to see how it unfolds in the coming months.