Nigeria’s Dangote refinery, Africa’s largest oil refinery, is in talks with Libya to secure crude oil supplies for its 650,000 barrels per day (bpd) plant, according to a senior executive. The refinery is also planning to approach Angola for oil supplies as it grapples with insufficient domestic crude availability.
Reuter reports that Devakumar Edwin, a senior executive at Dangote refinery, revealed to Reuters that discussions are underway with Libya, and similar talks are planned with Angola and other African countries. This move comes as the $20 billion refinery, built by Africa’s richest man Aliko Dangote, struggles to obtain adequate crude supplies within Nigeria due to theft, pipeline vandalism, and low investment in the sector.
Since beginning operations in January, the refinery has been forced to import crude from as far as Brazil and the United States to maintain production. The facility, designed to end Nigeria’s dependence on imported fuels, is now looking to diversify its crude sources to ensure consistent operations.
Edwin also disclosed that international traders and oil companies, including Trafigura, Vitol, BP, and TotalEnergies, are among the biggest buyers of Dangote’s gasoil, with much of the product being exported. This development indicates that Dangote is increasing its gasoil exports to West Africa, potentially taking market share from European refiners.
To manage supplies and product sales, Dangote has established an oil trading arm with staff in London and Lagos. However, the refinery faces regulatory challenges, with Nigeria’s upstream regulator claiming that the sulphur content in its gasoil exceeds the required limits. Aliko Dangote has denied these allegations, stating that the sulphur levels have decreased and will continue to fall as production increases.
As Dangote refinery seeks to overcome its supply challenges and establish itself as a major player in African oil refining, its negotiations with Libya and Angola could have significant implications for regional oil trade and Nigeria’s domestic fuel supply situation.
