Breaking: NNPC No Longer Owns 20% Stake in Dangote Refinery
Nigeria’s prominent Dangote oil refinery is reportedly reselling cargoes of U.S. and Nigerian crude amid ongoing technical issues, according to four trade sources familiar with the matter, Bloomberg reports. This development comes as the refinery faces operational challenges.
Three sources attributed the reselling to problems with the refinery’s crude distillation unit (CDU). However, a Dangote executive dismissed these claims, asserting that the CDU is fully operational. The refinery’s spokesman also denied allegations that Dangote was offering to sell Nigerian crude.
The refinery, which began production in January, is set to become the largest in Africa and Europe once it reaches full capacity. This could disrupt the profitable Europe-to-Africa fuel trade and position Nigeria as a major fuel exporter.
Sources revealed that cargoes of Nigerian Escravos and Forcados crude, along with U.S. WTI Midland crude, were among those being offered. Traders noted that the refinery has been importing several crude cargoes monthly. While such resales by refineries are rare, they are not unprecedented, traders added.
The news led to a decline in crude prices, with Brent crude dropping as much as 2.5% towards $80 a barrel before recovering to above $81 by 1700 GMT on Friday.
The Dangote refinery, built at a cost of $20 billion by Africa’s richest man Aliko Dangote, aims to reduce Nigeria’s reliance on imported fuel. Despite being Africa’s largest oil producer, Nigeria has continued to import fuel due to underperforming domestic refineries.
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