Dangote Clarifies Crude Supply Issues, Urges Enforcement of Domestic Supply Obligations

The Dangote Group has issued a statement to clarify recent reports concerning its crude oil supply arrangements with the Nigerian National Petroleum Corporation (NNPC).

Contrary to media speculation, the company emphasized that it has not accused NNPC of failing to provide crude oil but rather highlighted challenges in securing its full crude requirement from domestic sources.

In the statement released by Anthony Chiejina, Group Chief, Branding and Communications Officer, Dangote addressed concerns about the enforcement of the domestic crude supply obligation.

The company noted that while NNPC allocated six cargoes for September out of the 15 required, efforts to secure the remaining crude from International Oil Companies (IOCs) operating in Nigeria have been unsuccessful.

“Our concern has always been that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is pushing for compliance, but the IOCs are not following the instructions to ensure we receive our full crude requirement from NNPC and the IOCs,” the statement read.

Dangote highlighted the financial impact of this shortfall, explaining that when the company is unable to obtain the necessary crude from domestic production, it is forced to purchase the same Nigerian crude from international traders at a premium.

This additional cost amounts to $3-$4 million per cargo, which significantly affects the refinery’s operations.

The statement called for stricter enforcement of the domestic crude supply obligation as mandated by the Petroleum Industry Act (PIA).

Dangote urged the NUPRC to ensure compliance from all parties involved, stressing that the law must be upheld to avoid the financial burdens associated with procuring crude at inflated prices from international sources.

Dangote’s clarification comes amid ongoing discussions about the stability of crude supply for the refinery, which is crucial for maintaining its production capacity and contributing to Nigeria’s energy security.

The company reiterated its commitment to working with relevant authorities to resolve the issue and ensure a steady supply of crude to meet its operational needs.

As the largest refinery in Africa, Dangote Refinery plays a critical role in Nigeria’s energy sector.

The company’s appeal for full enforcement of the domestic crude supply obligation underscores the importance of consistent and reliable crude access for the refinery’s continued success.

The statement concluded by reaffirming Dangote’s commitment to transparency and collaboration with all stakeholders to achieve mutually beneficial outcomes for the Nigerian oil and gas industry.