Nigeria's Dangote mega refinery is now poised to import the lion's share of its feedstock from domestic sources for Q3, according to Bloomberg data, indicating a reduction of U.S. crude oil intake.
In the second quarter of this year, the embattled Dangote refinery was acquiring less than 75% of its crude feedstock from domestic sources.
Developments at Nigeria's Dangote refinery can easily impact oil prices, as they did in July, when Dangote said it might resell imported U.S. oil as it shifts its focus to domestic sources, which has been an issue of significant contention throughout the refinery's emergence. Also impacting markets is Dangote's canceling of two tenders that would have seen the refinery scoop up another 6 million barrels of American crude for September, Bloomberg reported.
And the coming months should see Dangote take in less and less U.S. crude as it shores up domestic sources. Beginning in October, according to Bloomberg, Dangote will begin crude purchases in local currency, with up to 445,000 barrels per day.
In the first half of this year, Dangote has taken in around 10 million barrels per month.
In the wake of the West's exodus from the Nigerian oil sector, the industry remains in a state of heightened flux and uncertainty. Dangote is what will keep Nigeria in the oil and gas game. Once running at full capacity, Dangote will be able to process 650,000 barrels of crude oil a day, making it competitive with the United States' largest refineries and over 50% bigger than the largest refinery in Europe.
By Charles Kennedy for Oilprice.com
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