Afrigather Dangote refinery, owned by billionaire businessman Aliko Dangote, is diversifying its crude oil provide by including Brazilian crude to its feedstock, BusinessDay’s findings have revealed.
Merchants with information of the matter stated the refinery, which remains to be ramping as much as full capability, will obtain a one-million-barrel cargo of Brazil’s Tupi crude for supply within the second half of subsequent month.
The cargo was bought by Petrobras, the merchants advised Bloomberg. Officers on the firm, and one at Dangote, didn’t instantly reply to requests for remark.
Learn additionally: Dangote Refinery seeks fresh 11 million barrels US oil amid Nigeria’s struggles
It’s the primary time that Brazil has exported oil to Nigeria, based on knowledge from the Latin American nation’s commerce ministry.
Aliko Dangote, the chairman of Dangote Group stated the refinery will proceed to import crude oil as his refinery scales up manufacturing and seeks different provide contracts.
“It additionally makes financial sense for us to tender for crude. If we may supply 100% Nigerian crude, then advantageous, however we will’t wait,” Dangote stated on the Africa CEO Discussion board 2024.
“There’s a little bit of an issue for us to supply the complete quantity of crude that we’re searching for domestically as a result of we’d like differing kinds and mixes. Until crude manufacturing improves – which we pray and hope for – we have to go elsewhere,” Dangote added.
In response to CAS, the refinery took supply of 11 WTI cargoes, or 9 million barrels, between February and Might, contrasting with round 18 million barrels of Nigerian crude deliveries.
Now, the transfer to safe a longer-term offtake settlement indicators a dedication by the refinery to extra completely diversify its crude sources, coinciding with a interval of maximum demand weak spot for Nigerian provide.
“It’s slightly stunning that they’re searching for time period WTI at this stage,” stated one West African crude dealer, noting demand weak spot that pushed Nigeria’s flagship Bonny Mild crude to a reduction to Dated Brent for the primary time since November on Might. 17.
Nigeria’s state-run Nigerian Nationwide Petroleum Firm (NNPC), additionally 20 p.c fairness holder within the challenge, has been extensively anticipated to produce the majority of Dangote’s crude calls for, promoting to the refinery in USD attributable to its location within the Lekki free zone.
Learn additionally: Moody affirms Dangote Sugar Refinery’s Caa1 CFR, Outlook changed to stable
However findings confirmed NNPC has struggled to fulfill its 300,000 barrels per day (bpd) of crude oil obligation to amass a 20 p.c stake within the Dangote Refinery.
The nation pumped about 1.28million barrels a day of crude and liquids in June, nonetheless far beneath its estimated manufacturing capability of two.6 million barrels a day. Crude theft, growing older oil pipelines, low funding, and divestments from oil majors working within the West African nation have all contributed to declining manufacturing.
