Dangote Refinery: International Oil Companies Frustrating Our Efforts To Buy Nigerian Crude
The Dangote Refinery has denied that it has never accused the Nigerian National Petroleum Corporation (NNPC) of failing to supply the crude oil required for its operations. Instead, the refinery has accused International Oil Companies (IOCs) of frustrating its efforts to purchase crude oil within Nigeria.
In a statement issued by Anthony Chiejina, Group Chief, Branding and Communications Officer, the refinery clarified that its primary concern lies not with the NNPC but with the non-compliance of International Oil Companies (IOCs) in fulfilling their domestic crude supply obligations, despite efforts by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
“Our attention has been drawn to media reports alleging that the Dangote Refinery has backtracked by acknowledging that NNPC supplied about 60% of the 50 million barrels we lifted,” the statement read.
“To clarify, we have never accused NNPC of not supplying us with crude. Our concern has always been that NUPRC is pushing, but IOCs are not following the instructions to enforce the domestic crude supply obligation and ensure that we receive our full crude requirement from NNPC and the IOCs.”
It’s worth recalling that on June 23, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries, also alleged that IOCs are deliberately and willfully frustrating the facility’s efforts to purchase local crude, claiming that “they are either asking for ridiculous/humongous premiums, or they simply state that crude is not available.”
The new statement indicates that Dangote Refinery, which is increasingly relying on imported crude to run its facility, is still in conflict with the IOCs.
“When we approached IOCs producing in Nigeria, they redirected us to their international trading arms or responded that their cargoes were committed,” Chiejina explained, adding that the oil facility is often forced to buy from IOCs at a premium of $3-$4 per barrel, which translates to an additional cost of $3-$4 million per cargo.
For the month of September, the refinery stated that while it needs 15 cargoes, with six allocated by NNPC, the facility has not been able to secure the remaining cargoes.
The refinery is urging the NUPRC to take more decisive action in enforcing the domestic crude supply obligation as mandated by the Petroleum Industry Act (PIA).
“We, therefore, still insist that we are unable to secure our full crude requirement from domestic production and urge NUPRC to fully enforce the domestic crude supply obligation as mandated by the PIA. It is a law and they just need to comply,” Chiejina emphasized.
Since commencing production earlier this year, the mega 650,000 barrels-per-day capacity refinery has not been able to produce Premium Motor Spirit (PMS), as the country continues to witness repeated fuel scarcity amid rising costs of imported products.
