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Business News of Friday, 3 November 2023


Dangote Refinery now ready to begin operation, as NNPC promises to supply crude oil

Aliko Dangote and Mele Kyari Aliko Dangote and Mele Kyari

By December, Dangote Refinery will receive crude oil from Nigeria’s state oil, the Nigerian National Petroleum Company Limited (NNPCL).

According to a Reuters report, the biggest African refinery will receive six cargoes of crude oil in December for a test run.

Delivery to start by December

As part of a one-year deal, one source in the NNPC said six cargoes, or 200,000 barrels per day would be delivered by the NNPC by next month. The source, however, added that in the future volumes will be supplied based on mutual agreement and availability.

Another source from the NNPC official estimated at least 4 to 5 cargoes or 130,000 barrels per day.

He added that some of the agreements have confidentiality clauses. The development is, however, expected to improve trading in the Atlantic Basin.

It is expected that the Lekki refinery will become an oil powerhouse once it is fully up and running. In addition, Africa's biggest refinery with 650,000 barrel per day capacity would make Nigeria a net exporter of fuels.

NNPC had ignored Dangote

This comes after an earlier report by that the NNPCL is shunning Dangote Refinery to swap crude oil for a loan with other entities.

The Executive Director, of Dangote Group, Devakumar Edwin, in an interview with S&P Global Commodity Insights, said that the NNPCL had committed its crude to other organisations.

Meanwhile, recent data from the Nigeria Extractive Industries Transparency Initiative (NEITI) highlighted why the NNPC ignored Nigerian refineries and swapped oil for refined products.

The report shows that the NNPCL traded crude oil worth N2.6 trillion for refined petroleum products in 2021.