The Dangote Refinery looks beyond borders to stabilize crude oil supply.
Nigeria’s Dangote Refinery (site), a USD 20 billion investment hailed as a game-changer for Africa’s energy sector, is navigating significant challenges in securing domestic crude oil. To mitigate these issues, the refinery is in discussions with Libya and exploring other potential suppliers, including Angola.
Domestic Supply Challenges
Despite Nigeria being Africa’s largest oil producer, the Dangote Refinery has faced hurdles in sourcing adequate crude oil locally. Issues such as theft, pipeline vandalism, and low levels of investment have forced the refinery to import crude from distant locations like Brazil and the United States, increasing operational costs and complexities.
Libya as a Strategic Partner
The refinery is actively seeking to import crude oil from Libya. Devakumar Edwin, a senior executive at the Dangote Refinery, confirmed that negotiations are ongoing to establish a stable supply chain. “We are talking to Libya about importing crude. We will talk to Angola as well and some other countries in Africa,” Devakumar Edwin told Reuters.He added that international traders and oil companies are among the largest buyers of Dangote’s gasoil, much of which is being exported. “The biggest offtakers are the two big traders Trafigura and Vitol and BP and, to some extent, even TotalEnergies. But all of them are saying they are taking it to offshore,” Edwin said.
Libya’s relative proximity compared to current suppliers could offer logistical and financial benefits, enhancing the refinery’s efficiency.
Expanding Import Sources
In addition to Libya, the Dangote Refinery is considering other African nations, such as Angola, to diversify its crude oil sources. This strategy aims to reduce dependency on a single supplier and create a more resilient supply chain. These efforts are crucial as the refinery seeks to stabilize its operations and maximize its 650,000 barrels per day capacity.
Wider Operations
As reported by Adekunle Agbetiloye,Edwin also stated that Dangote’s oil trading arm is now operational, with staff based in London and Lagos, to manage supplies and sell products. Dangote recently revealed plans to list the fertilizer and petrochemical divisions of the Dangote Refinery on the stock exchange in the first quarter of 2025.
The Dangote Refinery’s pursuit of crude oil from Libya and other African nations highlights its proactive approach to overcoming domestic supply challenges. As the refinery continues to expand its global footprint, these strategic partnerships will be instrumental in ensuring its long-term success and contribution to the African energy landscape.
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