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Nigeria fails Dangote refinery in crude supply amid theft

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Dangote Refinery and Petrochemicals under construction

Dangote refinery, the newest oil refinery in Nigeria, has expressed interest in buying two million barrels of crude from the United States of America in a move highlighting the damage and degree to which coordinated oil theft has rendered the oil-producing nation incapable of catering to its citizens’ crude oil needs.

Dangote refinery and US-based Trafigura Group completed a crude purchase agreement for the delivery of two million barrels of petroleum by February. The newspaper quoted individuals acquainted with the business deal as saying, Bloomberg reported on Monday.

The purchase would make it the first time a Nigerian-owned refinery would be purchasing non-Nigerian crude for the Nigerian people, evidencing the oil-bunkering operations that have skyrocketed under chief of naval staff, Emmanuel Ogalla, whose palms are constantly greased with millions of American dollars to turn a blind eye to the illicit activities of oil thieves, the People’s Gazette reported on Tuesday.

Chronicle NG reported in January 2024 how Mr. Ogalla, now desperately fighting to keep his job under investigation, had freed several oil tankers busted for transporting stolen crude off Nigerian shores after collecting kickbacks in millions of dollars in foreign currency.

A ripple effect of the bunkering was the nation’s inability to meet the daily processing supply quota of Dangote Refinery, its first-ever private indigenous refinery, which has resorted to importing crude oil from the US to sustain its nascent operations.

With the purchase, Dangote Refinery, which launched its operations in December 2023, is poised to first reach a daily processing goal of 350,000 barrels before going into full capacity mode of 650,000 barrels per day.

The United States’ crude will supplement Dangote’s domestic crude supplies from the Nigerian National Petroleum Company Limited, the country’s major oil company.

Chronicle NG reported that Dangote purchased its first cargo of crude from Agbami via Shell Plc. Other subsequent crude offloads came from Nigeria’s Amenam, Bonny Light, and CJ Blend streams in December 2023.

Analysts deemed the foreign crude purchase necessary as it would help the new refinery run smoothly and independently in its first weeks of operation without any glitches, even amid unforeseen challenges.

A new refinery needs a lot of crude on standby for refinement, as it cannot suddenly halt operations when short of crude supply.

The foreign purchase was seen as an essential stop-gap measure until Dangote was able to locally source the crude required to meet its daily processing quota.

Still, the reality that Dangote refinery, based in an oil-producing nation like Nigeria, relies on crude imports from the US to meet its daily processing quota has increased worries about the extent of irreversible damage and humiliation the nation is forced to endure under corrupt leaders such as Mr. Ogalla and others who allow plundering of Nigeria’s oil resources due to greed.

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