After Buying From Algeria, Dangote Refinery Finds Another African Country To Import Crude Oil

• The Dangote Refinery faces challenges in sourcing crude locally, which has halted its naira-for-crude deal with local refineries
• After buying from Algeria, the Dangote Refinery will look to another African country to import crude oil as it nears full production capacity
• The refinery and the Nigerian National Petroleum Corporation (NNPC) are renegotiating a new deal

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Dangote Petroleum Refinery has bought its first cargo of Equatorial Guinea’s medium-sweet, Ceiba crude.

This marks another step in its efforts to diversify crude supply sources as it struggles to get enough from local sources.

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Details of the Dangote crude payment from Equatorial Guinea

According to Argus Media, sources familiar with the deal said Dangote bought a 950,000-barrel cargo that loaded over April 12-13 from BP last week.

The financial terms of the transaction were not disclosed.

Argus reports that most Ceiba exports typically head to China, with around 18,000 bpd discharged there last year.

Other shipments were sent to Spain and the Netherlands, according to Vortexa tracking data. Two cargoes from February and March this year are also signalling Zhanjiang, China, as their destination.

Traders noted that the purchase of Ceiba crude by Dangote’s refinery aligns with its strategy to diversify feedstock sources.

Last month, Dangote Refinery acquired its first cargo of Algeria’s light sweet Saharan Blend crude from trading firm Glencore, with delivery scheduled between March 15 and 20, Punch reports.

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Also, it imported crude oil from Algeria.

NNPC crude oil sale

Meanwhile, the NNPC is negotiating with Dangote to extend the naira-for-crude arrangement, under which crude prices are set in dollars while the refinery pays the naira equivalent.

Any adjustments to the deal could prompt Dangote to increase its reliance on imported crude, the Argus report noted.

Refinery sources previously told Argus that Dangote aims to source at least 50% of its crude needs from the international market and is constructing eight storage tanks to support this effort.

Aliko Dangote, the refinery’s founder, stated last month that the plant intends to reach full capacity in March. However, crude supply shortages could hinder these ramp-up plans, Punch reports.

NNPC spokesman Olufemi Soneye recently disclosed that 48 million barrels of crude have been supplied to the refinery since the naira-for-crude deal began in October 2024.

He added that since the facility’s launch in 2023, a total of 84 million barrels had been provided.

This translates to an average daily supply of 300,000 barrels from NNPC, far below the refinery’s 650,000 bpd capacity.

Industry experts say Dangote must secure additional foreign crude to meet its full production target.

Marketers project new petrol prices

Legit.ng earlier reported that the continued crash in petrol prices could lead to the commodity selling at N800 per litre.

Expert believes that the crash in landing costs will intensify the price war between the two biggest oil firms in Nigeria.

There is also a prediction that fuel prices could to N500 per litre if oil prices drop to $40 per barrel and the naira rises below N1,000 to a dollar.