Naira-for-Crude Initiative Takes Off*: Dangote Gets NNPC's First .
The Dangote Petroleum Refinery has received four shipments of crude oil from the Nigerian National Petroleum Company Limited (NNPCL) under the naira-for-crude agreement, officials from the refinery and the Federal Government confirmed on Tuesday.
The deliveries were made over the past three weeks, following the government's launch of crude sales to local refineries in exchange for payment in naira. Sources familiar with the deal revealed that the refinery is still expecting additional crude shipments from NNPCL, which oversees the country’s hydrocarbon resources.
The $20 billion refinery, located in Lekki, Lagos, is now preparing to begin direct sales of refined Premium Motor Spirit (PMS), also known as petrol, to domestic distributors.
In an interview with our correspondent, a senior refinery official confirmed the progress, stating that the first phase of the naira-for-crude agreement is set to last six months, with the possibility of renewal by the Federal Government.
“The naira-for-crude arrangement has begun, and we’ve so far received four cargoes, with more expected in the coming week. All four shipments were delivered within the last three weeks,” the official said. However, she declined to disclose the cost per barrel of the crude supplied.
“This initial phase of the agreement is limited to six months, after which the government may choose to renew it or let it expire. As of now, we don’t know what will happen beyond the first six months.”
The 650,000-barrels-per-day refinery faced initial challenges securing crude oil when operations began a few months ago. Dangote Group President, Alhaji Aliko Dangote, had expressed concerns that some international oil companies (IOCs) were attempting to undermine the project by withholding crude supplies.
The Dangote Group accused the IOCs of insisting on selling crude through foreign intermediaries, driving up local prices. The company reported that trading arms were offering crude at $2 to $4 per barrel above the official price, further complicating procurement for the refinery.
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