Dangote Refinery Imports Crude as NNPCL Swaps Oil for Loans

The Executive Director of Dangote Group, Devakumar Edwin has revealed that Dangote Petroleum Refinery is currently importing crude oil and expecting its first crude cargo in two weeks’ time.

Although the Nigerian National Petroleum Company Limited, NNPCL  trades crude oil on behalf of Nigeria, Edwin in an interview on Monday, said the NNPCL had committed its crude to other entities.

The Dangote refinery boss did not disclose the other entities receiving the oil company’s crude but NNPC disclosed last month that it had entered into a $3bn crude oil-for-loan deal with African Export-Import Bank.

The deal allowed the company to pledge future oil production to the bank  as repayments for the loan.

Also, NNPC sources told journalists on Tuesday that the company had entered into crude oil contracts with a number of entities, a development that made it impossible for the organization to meet Dangote’s needs earlier.

A top official of the oil company, however, said plans were already underway to ensure Dangote’s refineries’ crude oil needs were met in November.

Also, Edwin pointed out that the importation of crude by Dangote refinery was temporary, as the firm would receive supply from NNPCL from November.

He further stated that the firm would begin the production of up to 370,000 barrels per day of crude that would give rise to Automotive Gas Oil, popularly called diesel, and jet fuel in October 2023.

For Premium Motor Spirit, popularly called petrol, the Dangote Group’s boss said the plant would begin production it by November 30, 2023.

This came as oil marketers stated that the prices of diesel and jet fuel would only crash when the Dangote refinery starts receiving crude oil from Nigeria, and not by importing crude.

Meanwhile, Edwin stated in the interview that the Dangote Refinery would initiate a gradual increase in petrol production, aiming to reach 650,000 barrels per day by November 30.

He emphasized the refinery’s readiness to receive crude oil, stating that they were waiting for the first vessel.

He explained that the setback was momentary, and the refinery would soon run exclusively on Nigerian crude oil  from November 2023.

In mid-August, the NNPCL announced that it had secured a $3bn emergency crude oil repayment loan from the African Export-Import Bank.

The signing, which took place at the bank’s headquarters in Cairo, Egypt, was reportedly to provide some immediate disbursement that will enable the NNPC Ltd to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.

Providing further explanation about the loan at the time, the Senior Special Assistant to President on Digital/New Media, O’tega Ogra, in several posts on X (formerly called Twitter), explained that the $3bn was not a crude-for-refined products swap loan, but an upfront cash loan against proceeds from a limited amount of future crude oil production.

This confirmed that the national oil firm had really made commitments to other entities using the crude produced by Nigeria