Nigeria joins the organization of oil IMPORTING countries as Dangote Refinery imports from the United States: “Lagos-based Dangote Refinery, led by Africa’s richest man Aliko Dangote, plans to purchase at least 24 million barrels of US crude oil over the next year as it scales up its processing capabilities. According to a report by Bloomberg, the $20 billion refinery has issued a term tender to buy two million barrels per month of West Texas Intermediate (WTI) Midland crude, starting in July.”
Despite Nigeria’s status as a leading crude oil producer in Africa, the country faces persistent challenges in meeting its domestic demand and fulfilling its OPEC quotas. In response, Dangote Refinery has opted to leverage more affordable oil sources, with a substantial portion of its feedstock now originating from the United States.
Against this backdrop, Ronan Hodgson, an energy analyst at FGE, noted, “Foreign oil remains more cost-effective than local supplies. This pattern is expected to continue as units designed to enhance diesel quality in the refinery are set to begin operations in the coming months.”
The request for foreign oil by a refinery in Nigeria is said to underline the substantial impact Dangote Refinery will have on international markets, highlighting the refinery’s strategic role in meeting global energy demands.
Dangote Refinery, poised to become Africa’s largest once fully operational, is positioned to play a significant role in the global crude and fuel markets. Thus, its procurement of US crude oil is largely seen as part of its commitment to optimizing operations and ensuring cost-effectiveness.
This is expected as over the last few years, we focused on drilling the existing wells without investing in discovering new wells. Now those wells are drying up, and Nigeria is caught up. This is a double whammy: we may not even have the financial capacities to invest for that exploration even as some of these oil majors continue to scale down on their investments in the nation.
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So, now that we have started importing oil, the Central Bank of Nigeria and NNPCL should adjust their ledgers as oil moves from credit to debit. Yes, the refinery which was conceived to save Naira will now add a new burden to Naira (the refinery has to source the USD for the oil import) because Nigeria has scored an own goal.
Nigeria is not being managed well, and this has been constant for years now; you can throw your verbal insult but I write to have liberation. Good People, this is not how to run a country; Nigeria is unlucky!
Dangote Refinery to Import 24 Million Barrels of US Crude Oil Amid Domestic Challenges
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