The Nigerian National Petroleum Company Limited’s supply of crude oil is running low for the $20 billion Dangote Petroleum Refinery in Lekki, thus the refinery plans to import more.
According to plant officials, production has increased to roughly 500,000 barrels per day, with the goal of reaching 650,000 barrels per day by June of this year.
The sources, who spoke in confidence because they were not authorized to speak to the media, insisted that the facility will need to buy more oil in order to reach its goal, even if they confirmed that the naira-for-crude contract is still in place as instructed by President Bola Tinubu last year.
According to reports, the NNPC is having trouble supplying 350,000 barrels per day of the 450,000 barrels of petroleum intended for local use in Nigeria to the refinery with a capacity of 650,000.
Officials stated that, given its present 500,000 bpd production capacity, it is necessary to search outside of Nigeria for the feedstock.
They contend that the issue is not that the NNPC cannot provide crude, but rather that the state-owned oil firm cannot provide all of the feedstock required by the refinery on a daily basis.
One of the plant’s reliable sources said, “Of course!” when asked if the refinery intends to acquire more crude now that the NNPC refineries are restarting.
This refinery has a daily capacity of 650,000 barrels. We are ramping up as well, as you are aware. You see, we might reach 650,000 by the middle of the year. What does 650,000 bpd mean, do you know?
“It is not that nobody is saying NNPC cannot do it,” another insider affirmed. No! However, have a look at what we have. A 200,000 bpd refinery is not what we are. 650,000 barrels are at issue here.
By mid-year, we will ramp up to 650,000 barrels per day from our current level of 500,000. Are you aware of its meaning? Therefore, sourcing crude oil wherever it is accessible is standard procedure.
The refinery is one of the biggest in the world, and a consultant to the refinery boasted in another conversation with our correspondent that the game is just for the “big boys.”
“No one is arguing that NNPC is incapable of doing it. The game, which is for the “big boys,” is now available.
How many refineries with a capacity of 650,000 are there in the world? In all of Europe, even? The OPEC report—have you seen it? They claimed that their PMS market in Europe is being impacted by the refinery. “The eagle has landed, of course,” he said.
“The whole thing is simple,” the analyst said in reference to Dangote gasoline’s burn rate. We are manufacturing the Euro 5 standard, as you are aware. Therefore, the quality will inevitably be great. The rate at which our gasoline burns is what Nigerians are witnessing.
Deal in Naira for crude
The 450,000 barrels of crude oil allotted for local refineries are insufficient as Nigeria’s refining capability grows.
The Dangote refinery, the Port Harcourt refinery, and six others will require 770,500 barrels of fuel each day, according to the Nigerian Upstream Petroleum Regulatory Commission.
When considering solely operational refineries, the Nigerian Midstream and Downstream Petroleum Regulatory Authority provided the NUPRC with statistics that estimated the nation’s refining capacity at 974,500 barrels per day.
Remember how President Bola Tinubu instructed the NNPC to sell crude oil to nearby refineries in naira back in July?
“Using the Dangote refinery as a pilot, the Federal Executive Council has authorized offering Nigerian refineries the 450,000 barrels intended for domestic use in Naira. Bayo Onanuga, Tinubu’s spokesperson, declared last year that the exchange rate would remain set for the duration of the deal.
By stating that it would only sell to refineries that produced gasoline, the committee overseeing the naira-for-crude arrangement started selling crude to the Dangote refinery in naira in October.
However, more refineries would be taken into consideration for the naira-for-crude agreement once the Port Harcourt and Warri refineries come online.
According to the NUPRC, eight refineries will require 123.5 million barrels of crude during the first half of 2025.
The refineries are the following: Duport Midstream Company Limited, Aradel refinery, Edo refinery, Kaduna refinery, Opac refinery, Waltersmith refinery, Dangote refinery, Port Harcourt refinery, and Warri refinery.
The Dangote refinery is expected to require 550,000 barrels of a blend of Nigerian crude oil per day, 17.05 million barrels per month, and 99.55 million barrels every month between January and June 2025, according to the crude oil production forecast of producing oil companies and the refining requirements of operational refineries in Nigeria signed by NUPRC Chief Executive, Gbenga Komolafe.
Waltersmith needs 4,500 bpd, Duport needs 2,000 bpd, Edo refinery needs 1,000 bpd, and Opac refinery needs 5,000 bpd.
The others are the 7,000 bpd Aradel refinery, the 60,000 bpd Port Harcourt refinery, the 75,000 bpd Warri refinery, and the 66,000 bpd Kaduna refinery.
The Federal Government would evaluate the program in April to see if it was successful or not.
Eight more tanks are already being constructed at the Dangote facility to hold imported crude.
Due to the unreliability of local supply, the $20 billion refinery intends to accumulate imported crude oil.
Low crude supplies from the Nigerian National Petroleum Company Limited “is driving import dependence,” according to refinery officials.
The $20 billion refinery’s crude storage capacity will increase by 41.67% to 3.4 billion liters with the construction of eight more tanks.
Devakumar Edwin, the vice president in charge of Dangote Industries’ oil and gas division, was cited as saying, “Importing crude from other countries instead of buying locally means that our crude stockpiles will have to be higher.”
In order to increase our storage capacity by one billion liters, we have begun constructing eight more crude tanks. Edwin stated that the NNPC’s crude supply is “still very low,” adding that four of them are almost finished.
It is anticipated that the NNPC will provide roughly 385,000 barrels of crude oil per day to the Dangote refinery, with payment made in naira, as part of the naira-for-crude scheme. If this has been the case, it could not be verified right away.
According to experts, local refineries may have to import as Nigeria increases its oil production.
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