Dangote Petroleum Refinery has purchased at least 16 million barrels of Nigerian crude oil for delivery in October, in a development that underscores the refinery’s growing appetite for domestic crude as it ramps up processing.
Four industry sources told Reuters that the volume was broadly in line with the refinery’s purchases in recent months, but significantly higher than its average Nigerian crude purchases last year.
The 16 million barrels comprise monthly allocations from the Nigerian National Petroleum Company (NNPC) and additional volumes purchased through a tender, amounting to about 520,000 bpd and accounting for most of the 700,000-bpd refinery’s monthly intake.
The refinery is currently preparing for an Initial Public Offering (IPO), with the reliability and adequacy of feedstock supplies expected to be an important consideration for investors.
Dangote’s increased purchases could also reduce the volume of Nigerian crude available for export at a time when international demand for the country’s crude is strong, following the Iran war and the resulting sharp reduction in competing Middle Eastern supply.
The final volume of Nigerian crude purchased by the refinery for October could increase further if Dangote secures additional supplies. Dangote did not respond to a request for comment by Reuters.
Kpler data showed that the refinery received 565,000 bpd of Nigerian crude in August, nearly twice its average Nigerian crude intake of 280,000 bpd recorded last year.
A source familiar with the matter said NNPC would supply Dangote with eight Nigerian crude cargoes for October, in addition to one cargo of US WTI Midland crude. That would match the monthly record for NNPC supplies to the refinery, following similar volumes supplied in April, May and August, according to Kpler data.
Two traders also said the refinery had purchased a second WTI cargo for October from a different supplier through a spot tender.
Dangote also secured additional Nigerian cargoes to bring its total October crude purchases to 16 million barrels.
The refinery has in recent months expanded the range of crude grades it sources from outside Nigeria, including supplies from Libya and Guyana, as it seeks to maintain feedstock availability for its large-scale operations.
Peter Uzoho
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