Nigeria’s oil industry recently recorded a significant breakthrough with the arrival of a tanker carrying crude oil to the Dangote Refinery offshore receiving terminal in Lekki. This cargo of 950,000 barrels of Agbami crude oil marks a significant milestone in the country’s oil sector.
The Dangote refinery, which officially launched in May, has been experiencing difficulties in crude oil supply, leading to a delay in fuel production initially scheduled for August 2023.
In an interview with the Financial Times, the president of Dangote Industries, Aliko Dangote, announced that the refinery would begin operations in December 2023 with a production target of 350,000 barrels per day.
The Nigerian National Petroleum Corporation (NNPC), which holds a 20% stake in the refinery, recently confirmed that it would supply six million barrels of crude oil to the Dangote refinery. Recall that the NNPC spokesperson, Garba Deen, had said the national oil company would scale down operations once the Dangote refinery was operational.
According to S&P Global, NNPC has also chartered several other tankers to transport cargoes of crude oil from Nigerian offshore fields to the refinery later this month. However, the report predicts that despite this supply of crude oil, the refinery could still encounter major operational problems and will only be able to reach full operational capacity from mid-2025.
Some oil sector analysts believe that crude oil supply problems are responsible for delays in operations at the Dangote refinery as well as those of other refineries in the country. The federal government attributed this situation to low oil production.
According to tanker tracking platform S&P Global MINT, the OTIS tanker, carrying the 950,000 barrel cargo, was chartered by the Nigerian National Oil Company and is the first delivery of crude oil to the Dangote refinery since its launch.
Some analysts estimate that the Dangote refinery will be able to meet at least 12% of Africa’s demand for petroleum products and could reduce the continent’s fuel imports by 36%.
This advancement in the supply of crude oil to the Dangote Refinery opens new prospects for Nigeria’s oil industry, while strengthening the country’s position as a key player in the global oil market. However, operational issues remain to be resolved for the refinery to reach full capacity and fully contribute to reducing fuel imports from the continent.