Nigeria’s mega-refinery, owned by billionaire Aliko Dangote, is currently reselling cargoes of both U.S. and Nigerian crude oil, according to multiple trade sources.
This unexpected move has sparked concerns about potential operational challenges at the newly commissioned plant.
Three industry insiders have linked the resales to technical problems at the refinery, which began operations in January with the ambitious goal of transforming Nigeria from a net importer to a major exporter of refined petroleum products.
Despite a Dangote executive asserting that the refinery’s crucial crude distillation unit (CDU) is functioning normally, market rumours of operational difficulties persist.
The refinery, designed to process 650,000 barrels of crude oil per day, is the largest in Africa and Europe.
Its successful operation is seen as pivotal for Nigeria, a major oil producer that has paradoxically relied heavily on fuel imports.
Among the crude grades being offered for resale are Nigerian Escravos and Forcados as well as U.S. WTI Midland. This practice, while uncommon, is not unprecedented in the industry.
News of the resales sent shockwaves through the oil market, with Brent crude prices falling sharply. The refinery’s capacity to overcome these initial hurdles and achieve its full potential remains a subject of keen interest for industry observers and the Nigerian public alike.
Dangote, Africa’s richest man, has invested $20 billion in the refinery, a project seen as a cornerstone of his vision for Nigeria’s economic transformation. As the situation unfolds, the nation watches closely to see if the refinery can fulfill its promise of self-sufficiency in refined petroleum products.
