Dangote refinery insists IOC thwarted crude oil purchases

Dangote Industries Limited (DIL) management has refused to back down over claims that International Oil Companies (IOCs) thwarted its efforts to purchase crude oil feedstock for the Dangote refinery.

The operator of the 650,000 barrel-per-day refinery insists the IOC is thwarting its efforts to buy crude because prices are too high.

The company was reacting to claims by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) that the IOC was not hampering the refinery.

NUPRC Chief Executive, Engineer Gbenga Komolafe, in a statement said the IOC was willing to sell to Dangote Refinery.

He said: “No producer has refused to provide crude oil to the Dangote refinery.”

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However, in a counter statement on Wednesday, DIL’s Vice President of Oil and Gas, Devakumar Edwin, said the implementation of the Domestic Crude Oil Supply Obligation (DCSO) guidelines would allow refineries to deal directly with companies producing crude oil in Nigeria.

He said: “Apart from the Nigerian National Petroleum Corporation Limited (NNPCL), to date, we have only purchased crude oil directly from one other local producer (Sapetro). All other producers refer us to their international trading arms.

“These international trading companies are non-value-added middlemen based overseas and earn margins from crude oil produced and consumed in Nigeria. They are not bound by Nigerian law and do not pay taxes in Nigeria on the unjustifiable margins they earn.

“The trading department of one of the IOCs refused to sell directly to us and asked us to find a middleman who would buy from them and then sell to us with a margin. We were in dialogue with them for 9 months and in the end, we had to take it to the NUPRC who helped resolve the situation.

“When we entered the market to buy the crude oil needed for August, the international trading institution informed us that they had included Nigerian cargoes in PT. Pertamina (Persero)’s tender, and we had to wait until the tender ended to find out what stocks were still available.”

By: Babajide Okeowo

Dangote Refinery insists IOCs frustating crude purchase first appeared on Latest Nigeria News | Top Stories from Ripples Nigeria.