Dangote Refinery to Reach 550,000 BPD Production Amid Crude Supply Challenges

A view of the newly-commissioned Dangote petroleum refinery is pictured in Ibeju-Lekki, Lagos, Nigeria May 22, 2023. REUTERSTemilade AdelajaFile Photo
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LAGOS,– Nigeria’s Dangote refinery is set to achieve a production level of 550,000 barrels per day (bpd) this year, which is 85% of its total capacity.

However, due to insufficient domestic crude supplies, the refinery is increasingly relying on crude imports, according to the plant’s CEO, Aliko Dangote.

During a tour of the facility on the outskirts of Lagos, Dangote revealed that the 650,000-bpd capacity refinery, the largest in Africa, had only received five crude cargoes from the state oil firm NNPC since it began operations earlier this year, falling short of the 15 cargoes it had anticipated.

“That is why we went ahead and bought some Brazilian crude, we also got U.S. crude. Anytime we go to IOCs (international oil companies) they say go to brokers,” Dangote stated. He further noted that brokers were charging a $4 mark-up per barrel of crude.

Previously, NNPC had agreed to supply the refinery with 300,000 bpd, but it has been struggling with low production levels, and some of its crude is being exchanged for gasoline imports.

The Dangote refinery, which was constructed at a cost of $20 billion, began production in January after facing several years of delays. Despite these challenges, the refinery is on track to significantly boost Nigeria’s refining capacity and reduce its dependency on imported petroleum products.

Source: Reuters