Libya and Nigeria’s Dangote refinery are in negotiations to secure oil

In an effort to get around issues with local supply, Nigeria’s Dangote refinery is in negotiations with Libya to get crude for the 650,000 barrels per day (bpd) plant. A senior official stated that the refinery will also look for Angolan oil.

The $20 billion refinery, the largest in Africa, was constructed on the outskirts of Lagos by Africa’s richest man, Aliko Dangote. Its purpose is to eliminate Nigeria’s reliance on imported fuels due to inadequate refining capacity.

Despite being the largest oil producer in Africa, Nigeria is facing several challenges, including theft, pipeline vandalism, and insufficient investment. Since Dangote started operations in January, the country has not been able to secure sufficient supply of crude oil.
Dangote has had to buy petroleum from the US and Brazil, among other places.

According to Devakumar Edwin, a senior executive at Dangote refinery, “we are talking to Libya about importing crude,” he told Reuters late on Saturday. “We will talk to Angola as well and some other countries in Africa.”

He added that foreign traders and oil corporations were among the largest purchasers of Dangote’s gasoil, which was mostly being exported, but he would not elaborate on the specifics of the discussions.
“The two largest traders, Trafigura and Vitol, along with BP and, to a lesser degree, TotalEnergies, are the greatest offtakes. However, they’re all claiming to be taking it offshore, according to Edwin.

Dangote is displacing European refiners in the gasoil market by increasing exports to West Africa, according to traders and shipping statistics.

According to Edwin, Dangote’s oil trading division was running, employing people in Lagos and London to assist with product sales and supply management. The intended trading arm was initially revealed by Reuters in March.

In a dispute with Dangote, Nigeria’s upstream authority claimed that the gasoil’s sulphur concentration exceeded the mandated 200 parts per million (ppm).

Rejecting that claim, Aliko Dangote stated that sulfur levels had been higher at the beginning of production but have since dropped to 88 parts per million (ppm) and would reach 10 parts per million in early August as output increases.