Tom Hunt’s Post

Nigeria 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. Crude theft, aging oil pipelines, low investment, and divestments from oil majors operating in Nigeria have all contributed to declining production. Dangote refinery is importing crude oil from the US to produce petroleum products, which are all exported. It is producting low sulphuric straight run fuel oil for US and EU markets. Let’s hope that the value it is getting for the LSSR fuel oil makes economic sense for the refinery. Due to uncertainty of availability of crude oil from Nigeria itself, Dangote is planning to import more crude from the US. It makes sense for Africa to to have complex state of the art refineries so that we produce our own products from our own oil. This is however not necessarily happening despite with the Dangote 65000 barrels a day refinery. For whose interest?

The Dangote Refinery plans to acquire 11 million barrels of US crude oil to supplement domestic supply, highlighting Nigeria's ongoing production issues. This underscores the refinery's role in Nigeria's ambition to become a net exporter of petroleum products. In the first half of the year, the refinery processed over 41 million barrels of feedstock, with a quarter sourced from the US. Aliko Dangote, chairman of Dangote Group, emphasised the necessity of diversifying crude sources due to the insufficient domestic supply.   Kaase Gbakon PhD Monsuru Sodeeq Etulan Adu Peter N. Ibogbe Pat Hinds Petlong Dakhling Dakim Dung Ikechukwu Promise Obialor Follow The African Energy Council for more energy news #DangoteRefinery #aecouncil #OilProduction #USCrudeOil #NigeriaOilIndustry #EnergySecurity #PetroleumProducts #OilImport #NNPC

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 ChallengesNigeria 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.New Draft Rules for Domestic RefineriesTo ensure local supply to the 650,000 barrel-a-day refinery, Nigeria’s upstre

Supply is key. The Nigeria Upstream Petroleum Regulatory Commission met with oil producers in the country to design frameworks on monthly price quote on crude supply; which will be mutually beneficial given volatile off the curve prices. Keen to see this unfold.

The Dangote oil refinery could bring to an end a decades-long gasoline trade from Europe to Africa worth $17 billion a year, heaping pressure on European refineries already at risk of closure from heightened competition. The refinery started production in January and cost $20 billion to build. It can refine up to 650,000 barrels per day (bpd) and will be the largest in Africa and Europe when it reaches full capacity later this year. It has long been touted as the turning point for Nigeria's quest for energy independence. Nigeria, Africa's most populous nation and top oil producer imports almost all its fuel due to lack of refining capacity. About a third of Europe's 1.33 million bd average gasoline exports in 2023 went to West Africa, a bigger chunk than any other region, with the majority of those exports ending up in Nigeria, Kpler data shows. "The loss of the West African market will be problematic for a small set of refineries that do not have the kit to upgrade their gasoline to European and U.S. specification," FGE's head of refined products, Eugene Lindell, said in an interview with Reuters, referring to more stringent environmental standards for other markets. As much as 300-400,000 pd of refining capacity in Europe is at risk of closure because of rising global gasoline production, according to Kpler's analyst, Andon Pavlov. Pavlov said UK's Grangemouth and Germany's Wesseling refineries could close ahead of schedule as a result of looming gasoline oversupply later this year and consequent pressure on refining margins. #Dangote #DangoteRefinery #Oil #News #Nigeria

The Dangote Refinery in Nigeria, Africa’s biggest, with a capacity of 650,000 barrels per day (bpd), has been commissioned, but full-scale production, including production of gasoline for Europe, is not expected to begin until the second half of 2024, analysts have told Bloomberg. After years of delays and massive cost overruns, Nigeria finally saw the giant oil refinery commissioned in May. The Dangote Refinery, built by the group of the same name of Africa’s richest person, Aliko Dangote, was inaugurated by Nigeria’s former President Muhammadu Buhari before he left office at the end of May. The government hopes the new refinery will alleviate a chronic fuel shortage that has turned Africa’s biggest oil producer into a fuel importer. Nigeria, OPEC’s top crude oil producer in Africa, has had to rely on fuel imports due to a lack of enough capacity at its refineries, some of which had to undergo refurbishment in recent years. https://lnkd.in/d8nazRUt

In early February I told us about plans by Dangote Petroleum & Petrochemicals to import 2 million bbls of WTI Midland crude oil that was to be delivered by Trafigura, a US-based oil trader, according to Bloomberg News. That oil shipment is en route and will arrive at the Lekki port in Lagos soon. Today, a news report attributed to Reuters has it that the Dangote refinery is planning to establish an oil trading unit that will help it in sourcing crude oil and other feedstock for the plant from anywhere in the world. As much as I would love the plant to source its crude locally to encourage domestic oil production and boost revenue earnings for the government, it is crystal clear that nothing can stop Dangote at this point. I mean, a refinery of that scale which took nearly 10 years to build can’t bank on or depend on a single supplier for its crude. This will only make it vulnerable to demand shocks and volatility, which, of course, are undesirable for a new business which has a huge cost overrun to clear. The 650,000 bbls per day Dangote refinery needs huge volumes of crude oil in stock to sustain operations. If they can't get the volume of crude they need locally, leave them to go where they can get it. As I have said previously, until the NNPC Limited dominates Dangote’s crude oil supply chain, Nigerians may never get to see the pump price of petrol selling anything below what it is currently. And that should really worry the federal government of Nigeria which has a reported 20% equity stake at the refinery. Yet they can't leverage its right of first refusal clause well *** PS. Turn on the notification bell 🔔 to stay in touch with my future posts on the energy industry which I have been covering for about 10 years now. I’m a trained chemical engineer, an energy analyst and the Managing Editor at The Bavijas Review. Let’s connect! #oilandgas #oilandgasindustry #bavijas #energyindustry

Dangote Refinery imports one-thirds of feedstock from US market – Report https://lnkd.in/d7W8iw7p This is sad and should never be allowed or encouraged by the government for whatever reason. We are not asking the government to subsidize Dangote, what we are saying is that it should regulate and moderate crude sales to local refineries. I don't understand how imported crude oil can be more expensive to import and refine than locally produced crude oil. It makes no sense to me at all. If our crude is relatively that expensive why do other countries still buy from us and not the US? I suspect something fishy! Why can't the government set a domestic crude price modulation that allows purchase of crude Naira only and sets the price at cost plus margin of + or - 5%? Thank you.

https://lnkd.in/dtdJbtHH "Lagos-based Dangote Refinery plans to purchase at least 24 million barrels of US crude oil over the next year as it increases its processing capabilities. The latest report showed that one out of every three barrels of feedstock at Dangote refinery comes from the US. Despite being one of Africa’s leading crude oil producers, Nigeria struggles to meet its Organization of Petroleum Exporting Countries (OPEC) quota and domestic supply demands." - Nairametrics Despite abundance of oil & gas resources, Nigeria at this moment cannot provide enough feedstock to NLNG and Dangote Refinery 😪. I find this heartbreaking. When we didn't have functional refineries, we exported crude oil and imported refined petroleum products. Now that we have refineries, we are importing crude oil. Well, I'm beginning to suspect international conspiracy. The global marketplace is Machiavellian in philosophy. It will take a Donald Trump kind of mindset for Nigeria's leaders to see through this mystery. Olu Arowolo Verheijen Taiwo Oyedele Seyi Tinubu

The Dangote oil refinery has issued tenders to sell two fuel cargoes for export, the first from the newly commissioned refinery, trading sources with knowledge of the matter told Reuters. The first cargo is 65,000 metric tons of low-sulphur straight-run fuel oil, which Dangote has awarded to Trafigura and is due to load at the end of February. The second tender is for about 60,000 tons of naphtha, three other sources said. Two of them added that the tender closes on Feb. 15. Loading details were not immediately available. Reuters said Dangote Petroleum & Petrochemicals and Trafigura declined a Reuters request for comment. The two fuels on offer are typical products of running light sweet crude through a crude distillation unit (CDU) in a refinery without further upgrading capacity. It is expected to take months for upgrading units to be brought online, experts have said. However, sources told Reuters last week that the refinery was preparing to deliver its first fuel cargoes to the domestic market within weeks. This is a welcome development. Even though the process is slow, there is progress. Dangote refinery is a huge potential shift for power and profit dynamics for Nigeria and other West African countries, it is just that the Nigeria factor is slowing the process. #GodBlessNigeria #MayTinubuSucceed #MayDangoteSucceed