Dangote oil refinery, indigenous oil refinery owned by Aliko Dangote, Africa’s richest man, is reselling cargoes of U.S. and Nigerian crude, four trade sources familiar with the matter said on Friday, according to a Reuters report.
Three of the sources indicated that the reoffer was linked to technical problems at the refinery.
However, a Dangote executive, when asked about the offers and market rumours of operational issues affecting the crude distillation unit (CDU), stated that the CDU is in operation.
The refinery, which began production in January, is set to become the largest in Africa and Europe upon reaching full capacity.
This could significantly alter the lucrative Europe-to-Africa fuel trade and transform Nigeria into an exporter of fuels.
Among the grades being offered were Nigerian Escravos and Forcados crude, as well as U.S. WTI Midland crude, according to the sources. Traders have reported that the plant has been importing several crude cargoes monthly.
While resales by refineries are rare, they are not unheard of, traders noted. Following the news, crude prices fell further, with Brent crude dropping as much as 2.5% towards $80 a barrel, before recovering to above $81 by 1700 GMT.
The 650,000 barrel-per-day refinery, built at $20 billion by Africa’s richest man Aliko Dangote, aims to reverse Nigeria’s reliance on fuel imports despite being Africa’s largest oil producer.
