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Dangote Refinery Gets 5m Barrels Of Crude Oil From US - Business (4) - Nairaland

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$19 Billion Dangote Refinery Gets Another 1 Million Barrels Crude Oil / Dangote Refinery Secures Permit To Process Over 300,000 Barrels Of Crude / Dangote Refinery Rules Out 2020, As Refinery Gets New Date (2) (3) (4)

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Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Solidex(m): 4:24pm On Jul 12
People don't seem to understand the depth of our problems.
Our crude has been booked in exchange for loan and NNPC is still soliciting for more loan to a tune of over $2Billion in exchange for our oil reserve.
You don't get it.
Your crude is no longer a national property until the loan are fully paid.
The only way out, is to either clear our foreign dept as soon as possible ( which is not feasible ) or we increase our margin of oil production to beat the target.

2 Likes

Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by CartelKenneth: 4:35pm On Jul 12
Devil don finish work for Nigeria 😢
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by SenecaTheYonger: 4:39pm On Jul 12
No wonder dollar scares 🤣
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Tareq1105: 4:41pm On Jul 12
StormpyBee:
I don't understand this news.

How can a company, located in an oil producing country be importing oil. There's something wrong with this country. Its apparently say, na we the do ourselves. Chi!

What a shame of a nation!

NNPC is a big fraud!

I am ashamed!

I wish you know the risk in this sector. Even the life of Dangote is under threat bcoz of importers in Nigeria and sub regional countries like Togo, Benin Republic, Ghana, etc the markets that Dangote intend to serve.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Kemadealadire(f): 4:41pm On Jul 12
This their economics isn't economicing at all.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Blazetrailer: 4:43pm On Jul 12
Dey there dey wait......na there you go grow old


adioolayi:
When will FGN try to ensure adequate supply of Crude to Dangote

No be the scarce FX e dey use import crude again..abi which Kain thinking Government dey do sef
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by ysg4real(m): 4:46pm On Jul 12
with this news, i think it may make sense for Dangote to do backward integration and start exploring oil himself for his refinery.
Sad that an oil producing country cannot supply the refinery.

2 Likes

Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by finallybusy: 4:51pm On Jul 12
That is two times the daily amount of oil the nation missed from 2011's protests.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Gajagojo: 4:51pm On Jul 12
erico2k2:

to buy Crude in Nigeria will be cheaper
Reasons

Cost of logistic is relatively cheaper as the Niger Delta is closer to lagos than the US
No Import duty will be paid in Nigeria
he could chose to pay the naira Equivalent of the crude with proper arrangement
The FG has or own %20 stake in Dangote refinery.
Limited entrance to international waters and taxes
No export duty from Host country
You want more reasons why it would have been cheaper to buy from Nigeria?
By the way, Nigeria has a type of crude Bony Light crude(Low Sulphur and Low density) which is easier cheaper to refine, hence the boys in the creek are refining. There are other stuff i can talk about but they wont make sense to you as you aint in that field.

You are talking rubbish without facts
A thing is cheaper or not is not about explanation

It is about facts How much is it it in the market that is the price. The price is a fact it is not an explanation

Crude oil prices change every day just like exchange rate and if you want to secure a price you buy what is called a futures contract.
That is the way the market operates it cannot change because of Dangote

You sell a December delivery today at $100 and when December comes it could be $90 or $130

So refiners have to take a risk and commit to a futures contract or hope there will be unsold product at short notice
Do you know how much Dangote is paying without facts you are just talking


You know a little and half knowledge is worse and more dangerous than no knowledge
The boys in the creek refining crude has nothing to do with low sulphur or cheaper to refine
If Nigerian oil was the highest in sulphur continent any where on earth would that stop them? Are they buying the crude? Please try to be logical


Sulphur is not the only thing that makes Nigerian oild the highest quality and you have no data on the sulphur content of the crude Dangote is buying

Cost of refining depends on so many factors

Dangote refinery is set up to refine all types of crude
Not all refineries can do that
The fact that he invested so much to set up his infrastructure that way tells you he was not planning on being reliant on Nigerian crude
The location of the refinery by the sea confirms that

he set up so he can receive crude BY TANKER from the sea

Not BY PIPELINE from the Delta

1 Like

Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by esemes256: 4:56pm On Jul 12
coleon:

Just say the reason is because Nigeria's crude is unavailable because it's been used to collaterize loans into the future and don't add the fact that US WTI is cheaper. I get angry when people are this context to the reason for importing crude from US because the price differential is very marginal.
US WTI Crude is selling for $83.65 while our own bonny light is $85.20 as at today meaning it's less than $2 per barrel difference. Now if you factor in the freight cost of a single vessel from the US to lekki which will run into millions of $ you will notice that it might probably cost Dangote more to buy US WTI despite the meaningless price difference you quoted.
Let's just face it that Nigeria is doomed and a failed country.

Thank you very much for the great analysis.
Dangote is in a tight position. As a business man, he needs input for his business so that he can generate revenue.
It just shows how doing business in Nigeria can be quite tricky.

2 Likes

Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by ZTsambad: 5:05pm On Jul 12
I just pity this nation the war that will come one day will be hard to stomach. Let this nation be playing with our future anyhow I truly pity the heads of those corrupt evils how it will roll from north to south all the monkeys in the zoo will clap tire
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Gboss247(m): 5:26pm On Jul 12
StormpyBee:
I don't understand this news.

How can a company, located in an oil producing country be importing oil. There's something wrong with this country. Its apparently say, na we the do ourselves. Chi!

What a shame of a nation!

NNPC is a big fraud!

I am ashamed!
Comparative advantage is has become rocket science in Nigeria.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Gboss247(m): 5:30pm On Jul 12
SaturnNick:
Something Nigeria has ooo. What a shame
Are aware that US is the largest producer of crude?

1 Like

Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Gboss247(m): 5:32pm On Jul 12
ahmedio2017:



Shut up your mouth, I don't know what exactly you this people want, you will keep on shouting government should privatise privatise.

Now look at the results, privatisation is and can never be the solution to our problems...

We should rather pressurise the government irrespective of the tribes to get to work. We kept playing blame game instead of us to tackle our oppressor. Chai o ma se o, it is a pity.
Are you aware successful are economies runs on private sectors?
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Gboss247(m): 5:37pm On Jul 12
Nazgul:

Nigeria's crude gas been used by our greedy politicians to collect loans running into billions of dollars. So technically we don't have any crude oil, cos any vessel leaving the country has already been sold.

That's what dangote is facing. Why do you think he has been ranting lately. He too isn't finding it easy as well.
Oga, serious business takes globally on the derivative market contracts like futures, options and swaps and also OTC like forward contract.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Nyne: 5:39pm On Jul 12
RealLordZeus:
No be Dangote's fault.. he's a business man..

Nigeria IOCs are not giving him oil, will he keep waiting and put his business on hold so that the naysayers will say they are right.

If I'm in his position, I will do exactly the same thing.

NNCP own 20% of the refinery. Does it mean that nnpc is also buying crude oil from USA ?
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Gboss247(m): 5:41pm On Jul 12
bdon12:

There goes our cheap PMS.After all f foreign exchange that was sold to dangote at official price.same government sold future crude to collect loans thereby leaving dangote without crude supply.
A simple research will help a lot, serious are conducted through the derivative market where futures, options and swaps are traded.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Gboss247(m): 5:42pm On Jul 12
bravehost4u:


It is just a cycle of madness.
Export Crude use the FX to import crude and refined fuel and export crude and fuel

Just tell me this is not madness.
And when you try giving explanations, check yourself well, you may be accustomed to the madness norm
The only madness here is when you failed to understand comparative advantage.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by TOMMYS: 5:45pm On Jul 12
OkCornel:
This generation of leaders can’t provide locally sourced crude for Dangote refinery?

If Dangote continues to source crude oil from overseas, isn’t that more pressure on demand for dollars which makes the naira depreciate further?

The government has to provide locally sourced crude ASAP for the refinery. Unless of course they’re in partnership with the neo-colonialists to further impoverish the nation.

Which wan be unless of course. $425m dey waka go because of one man. And Una dey talk about dollar 💰. Omo naija don go

Patiently observing.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by IrepChrist: 5:46pm On Jul 12
DesireV:

Stop misinforming people chief. You can search the world largest crude oil producers. How will you say USA isn't an oil rich country? They purchased most of their reserves that can last them 200years, where do you think they can store that? Google USA annual crude consumption and multiply it by even 50 (not 200) and see if you're making sense.

Do your research very well.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Gboss247(m): 5:49pm On Jul 12
NADESMAN:
The game we do not understand is that Nigeria has been borrowing money from America,China,etc and the only means of payment is from crude oil.

So this countries have deal of drilling oil for many years to recover their money.
That is why Dangote will go to America to buy oil that they took from Nigeria

For those of you thinking that Dangote refinery will make a change in petroleum products Availability,you all have entered one chance.
You are wrong, oil, gas, diamond, gold, stocks, crypto, forex etc are globally with futures, options and swaps contracts through the derivative market and forward contract through OTC. Running a business with spot markets is simply inviting bankruptcy.

1 Like

Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by erico2k2(m): 6:06pm On Jul 12
Gajagojo:


You are talking rubbish without facts
A thing is cheaper or not is not about explanation

It is about facts How much is it it in the market that is the price. The price is a fact it is not an explanation

Crude oil prices change every day just like exchange rate and if you want to secure a price you buy what is called a futures contract.
That is the way the market operates it cannot change because of Dangote

You sell a December delivery today at $100 and when December comes it could be $90 or $130

So refiners have to take a risk and commit to a futures contract or hope there will be unsold product at short notice
Do you know how much Dangote is paying without facts you are just talking


You know a little and half knowledge is worse and more dangerous than no knowledge
The boys in the creek refining crude has nothing to do with low sulphur or cheaper to refine
If Nigerian oil was the highest in sulphur continent any where on earth would that stop them? Are they buying the crude? Please try to be logical


Sulphur is not the only thing that makes Nigerian oild the highest quality and you have no data on the sulphur content of the crude Dangote is buying

Cost of refining depends on so many factors

Dangote refinery is set up to refine all types of crude
Not all refineries can do that
The fact that he invested so much to set up his infrastructure that way tells you he was not planning on being reliant on Nigerian crude
The location of the refinery by the sea confirms that

he set up so he can receive crude BY TANKER from the sea

Not BY PIPELINE from the Delta
So amongst the gibberish you wrote up there how does any of your ill points cross out what I have written, so in your multitude of what you called knowledge common sense did not tell you that when you remove Import and export taxes/duties its cheaper to buy same Crude from Nigeria. Besides Bony sweet the other option for Dangote to distillate is Brent which is cheaper. The USA produce same kind of crude Nigeria produce so it would be same cost to distil either US or Nigerian crude.
The Point I was trying to make b4 you came with your cockiness and arrogance is simple. It would have been cost effective for Dangote to buy Bony Light than to go to US to buy the same light. The difference here is[b] Logistic cost[/b] key word Logistic cost. The cost of barrel is the same but cost to bring it to Nigeria Dissipates any gains compared to if he got it from the Delta as he wont be importing it.
I did say I will keep some terms you might not understand you delve into Sulphur. Now you sound xtreemly silly and naĂŻve to think Dangote refinery was set up to refine all grades of crude, someone who cannot even boost of producing Euro 6 Diesel as we speak Now let me school you a bitThe four primary types of oil aresadGroup) are as follows, I know you will argue as you have no clue.
(1 The Very Light Oils / Light Distillates which include: Jet Fuel, Gasoline, Kerosene, Light Virgin Naphtha, Heavy Virgin Naphtha, Petroleum Ether, Petroleum Spirit, and Petroleum Naphtha. These oils tend to be highly volatile and can evaporate within just a couple of days, which quickly diffuses and decreases toxicity levels.
(2 Light Oils / Middle Distillates which include: Most Grade 1 and Grade 2 Fuel Oils and Diesel Fuel Oils as well as Most Domestic Fuels and Light Crude Marine Gas Oils. These oils are moderately volatile, less evaporative and moderately toxic.
(3 Medium Oils: Most of the crude oil on the market these days falls into this particular category. Low volatility makes for messier & more complex “clean ups” and when it comes to the increased toxicity levels.
(4 Heavy Fuel Oils which include the heavy crude oils, Grade 3,4,5 and 6 Fuel Oils (Bunker B & C) as well as Intermediate and Heavy Marine Fuels. With these oils there is very slow and little evaporation and therefore toxicity is highly increased. This not only means potentially severe contamination for fish, fowl and fur-bearing creatures, but possible “long term” contamination of water and soil as well.

What people like you fail to understand is that In its natural, unrefined state, crude oil ranges in density and consistency, from very thin, light weight and volatile fluidity to an extremely thick, semi-solid heavy weight oil.
There is also a tremendous gradation in the colour that the oil extracted from the ground exhibits, ranging all the way from a light, golden yellow to the very deepest, darkest black imaginable.
For the purpose of having a set, agreed upon “vocabulary,” the petroleum industry often uses references to “Geographical Locations” in order to descriptively classify crude oils.
This is due to the fact that oil from different geographical locations will naturally have its own very unique properties. These oils vary dramatically from one another when it comes to their viscosity, volatility and toxicity.
When Crude oil comes as a commodity to be sold there is actually over 160 types in the commodity market and sold at different prices. But for the purpose of this argument I will dwell on the two i deal with on a daily bases from the Uk and the US.
West Texas Intermediate (WTI) is an extremely high quality crude oil which is greatly valued for the fact that it is of such premium quality, more and better gasoline can be refined from a single barrel than from most other types of oil available on the market.

The WTI “API Gravity” is 39.6 degrees, which makes it a “light” crude oil, with only 0.24 percent sulfur, which makes it a “sweet” crude oil. The term “API Gravity” refers to
the “American Petroleum Institute Gravity, which is a measure that compares how light or heavy a crude oil is in relation to water. If an oils “API Gravity” is greater than 10 then it is lighter than water and will float on it. If an oils “API Gravity” is less than 10, it is heavier than water and will sinks.

These combined qualities as well as location make WTI a prime crude oil to be refined in the United States, which is by far, the largest gasoline consuming country on the planet. The vast majority of WTI crude oils are refined in the Midwest and Gulf Coast regions. Even with production of WTI crude oil in decline, WTI is often priced from $5 to $7 higher per barrel than “OPEC Basket” oil and on average, $1 to $2 higher per barrel than “Brent Blend” oils.

Brent Blend is actually a combination of different oils from 15 fields throughout the Scottish Brent and Ninian systems located in the North Sea. Its “API Gravity” is 38.3 degrees, which makes it a “light” crude oil, but clearly not quite as “light” as WTI. It also contains about 0.37 percent sulphur, which makes it a “sweet” crude oil, but then again, not quite as “sweet” than WTI.

Brent Blend is quite excellent for making gasoline and middle distillates, both of which are utilized in large quantities in Northwest Europe, where Brent blend crude oil is most often refined. Brent Blend production, much like that of WTI, is also on the decline, but it remains a major benchmark for other crude oils in Europe or Africa. Brent Blend oil price is often priced at a $4 higher per barrel compared to the OPEC Basket price.

OPEC Basket oil is a collective seven different crude oils from Algeria, Saudi Arabia, Indonesia, Nigeria, Dubai', Venezuela and the Mexican Isthmus. Because OPEC oil has a much higher percentage of sulfur within its natural make-up and therefore is not nearly as “sweet” as WTI or even Brent Blend and since it is also not naturally as “light” as well, the prices of OPEC oil are normally consistently lower than either Brent Blend or WTI. However, OPEC’s willingness or ability to quickly increase production when necessary makes OPEC a consistent “Major Player” in the oil industry!
By the way who in you shallow mind you think when I say buy from Nigeria I meant by pipe, thesame way vesel buy from Nigeria at the export terminal same way Dangote would have bought. Go to koko google aworitse and see howmany ships that young man has in his ship yard.
you was talking about prices of oil, here is it.We use these links in trade , https://markets.businessinsider.com/commodities/oil-price
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Gboss247(m): 6:07pm On Jul 12
erico2k2:

to buy Crude in Nigeria will be cheaper
Reasons

Cost of logistic is relatively cheaper as the Niger Delta is closer to lagos than the US
No Import duty will be paid in Nigeria
he could chose to pay the naira Equivalent of the crude with proper arrangement
The FG has or own %20 stake in Dangote refinery.
Limited entrance to international waters and taxes
No export duty from Host country
You want more reasons why it would have been cheaper to buy from Nigeria?
By the way, Nigeria has a type of crude Bony Light crude(Low Sulphur and Low density) which is easier cheaper to refine, hence the boys in the creek are refining. There are other stuff i can talk about but they wont make sense to you as you aint in that field.
All those factors you are irrelevant, because what is considered in international trade is comparative advantage.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by BarrElChapo(m): 6:09pm On Jul 12
StormpyBee:
I don't understand this news.

How can a company, located in an oil producing country be importing oil. There's something wrong with this country. Its apparently say, na we the do ourselves. Chi!

What a shame of a nation!

NNPC is a big fraud! He

I am ashamed!

Ppogba what do you have to say ?
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by erico2k2(m): 6:20pm On Jul 12
IrepChrist:
The united states is not an oil rich country. Most of all thier reserves were purchased from oil producing nations. And your darling Nigeria use to be one of them. Today they have enough oil that could last them 200years. That is a country with vision. Whilst buying from us, we squandered the money. Now they have more than enough to sell back to us and make profits.
This is street talk, Dem say talk.The USA is the larges oil producer in the whole world.36 states in the USA produce oil,you can imagine how vast that is.in 2023 the USA produced 21.9 million Barrels of oil
Saudi is number two and Russia is number three then canada followed by China the iran with brazil at number seve, even the UAE is number 8 with 4.6million barresl.
U can check here
https://investingnews.com/daily/resource-investing/energy-investing/oil-and-gas-investing/top-oil-producing-countries/
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by erico2k2(m): 6:21pm On Jul 12
StormpyBee:
I don't understand this news.

How can a company, located in an oil producing country be importing oil. There's something wrong with this country. Its apparently say, na we the do ourselves. Chi!

What a shame of a nation!

NNPC is a big fraud!

I am ashamed!
check where the news came from and its source.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by RealLordZeus(m): 6:23pm On Jul 12
Nyne:


NNCP own 20% of the refinery. Does it mean that nnpc is also buying crude oil from USA ?
Indirectly
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by Teymanhenry(f): 6:25pm On Jul 12
reiddecuti:
And those ronus thinking that Dangote refinery will be the game changer instead of pressing government neck to revive at least 2 out of the 4 government own refinery, they said no.

This is how the government (the really cabals) have sworn never to see the petroleum sector work, hence the reason Dangote might find it difficult sourcing crude from Nigeria.

The eldorado we yell in this country is still far.

Are you aware that Dangote is complaining that Nigeria and it's marketers have refused to sell him crude oil that they prefer exporting to foreign buyers?
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by ahmedio2017(m): 6:34pm On Jul 12
Gboss247:
Are you aware successful are economies runs on private sectors?



Lolzzzzzzzz u really made me laugh.
You wanna give USA as instance ba? Privatisation is meant for developed country and not developing country like ours. That is built on corruption...
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by erico2k2(m): 6:35pm On Jul 12
Gboss247:
All those factors you are irrelevant, because what is considered in international trade is comparative advantage.
Bross i am a flued Engineer by profession in the Uk,I facilitate the comprehensive flow of any fluid on shore and offshore in the Uk upstream and down stream sector. I am not new to this topic, I have at least 17 years on this.
. How does Dangote buying Oil from the USA gives him that advantage? producing crude in Nigeria is very expensive yet in the open market it is sold at same price as of those where Oil is easily and cheaply produce. Oil trade is global and sold at the Brent crude bench mark. Won't it have been more rewarding saying the USA is at gain here? Meaning the advantage is with the USA not the Nigerian buyer??
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by erico2k2(m): 6:36pm On Jul 12
Teymanhenry:


Are you aware that Dangote is complaining that Nigeria and it's marketers have refused to sell him crude oil that they prefer exporting to foreign buyers?
Reason is simple, they can manipulate the figures when it goes to international coys.
Re: Dangote Refinery Gets 5m Barrels Of Crude Oil From US by erico2k2(m): 6:37pm On Jul 12
Gboss247:
Comparative advantage is has become rocket science in Nigeria.
I thin you just hear this grammar the 1st time E dey sweet you!

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