The Dangote Refinery has unveiled plans to import a minimum of 24 million barrels of US crude oil within the next year to enhance its processing capabilities.
According to a Bloomberg report, the $20 billion refinery has issued a term tender to acquire 2 million barrels of West Texas Intermediate (WTI) Midland crude oil each month for 12 months, starting in July. This totals 24 million barrels over the year.
This move to import US oil highlights Nigeria’s ongoing challenges in boosting its crude production, which remains significantly below its potential capacity. The decision to source more affordable supplies from abroad underscores the refinery’s potential impact on global crude and fuel markets.
Elitsa Georgieva, Executive Director at Citac, an energy consultancy focusing on the African downstream sector, commented: “The supply of Nigerian crude is insufficient, unavailable, and sometimes unreliable. In contrast, WTI is available, reliable, and competitively priced. Buying different feedstocks also provides flexibility and optionality for the refinery, making the tender economically sensible for Dangote.”
Nigeria has struggled to meet its OPEC+ production quota for over a year, with output at approximately 1.45 million barrels per day in April, far below the 2.6 million barrels capacity. Issues such as crude theft, aging infrastructure, lack of investment, and divestment from major oil companies have contributed to this decline.
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In response, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has drafted new regulations requiring oil producers to sell crude to domestic refineries before exporting any surplus. This policy aims to support local refineries like the 650,000 barrel-per-day Dangote refinery, which has been importing cheaper US oil due to insufficient local supply.
These new rules could enable Dangote to source more crude oil domestically, strengthening Nigeria’s refining capacity and reducing dependency on foreign oil.
