Major international oil exploration companies in Nigeria are now set to begin crude for naira sales to Dangote Refinery, with March 2025 as a probable start date......CONTINUE READING THE ARTICLE FROM THE SOURCE>>>>>
These companies, including Shell, Chevron, and Total Energies, are currently in talks with the Dangote Refinery to commence the sales.
Other domestic refineries in Nigeria will also benefit from this crude-for-naira deal which is set to change the energy sector in Nigeria.
Mr. Eche Idoko, the Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria, revealed that discussions are in the early stages and should be concluded before March, the PUNCH reports.
He noted that the major IOCs have shown willingness to see it through and that the conclusions will reach other modular refineries in the country.
Crude-for-naira sales begin
The crude-for-naira deal started in October 2024, with the Nigerian National Petroleum Company Limited selling crude oil to Dangote Refinery for naira.
The rationale was to make crude available to local refineries and reduce pressure on the naira in the foreign exchange market.
With only 450,000 barrels of crude allocated to the local refineries, there is still a vacuum and the Dangote Refinery disclosed severally that it was not getting sufficient crude from the NNPCL to attain full production capacity.
There were also reports showing that other local refineries were not getting consistent crude from NNPCL under the crude for naira deal.
Now, these oil exploration companies will join the NNPC L in the crude-for-naira deal to provide sufficient crude to domestic refineries and eliminate any need for crude imports.
It is reported that the Dangote Refinery had recently imported up to 12 million barrels of crude oil from the United States of America, to support production.
Marketers react to the news
Nigerian petroleum marketers have reacted to the latest development, expressing worries that the IOCs may back out of the deal since they have to repatriate funds in foreign currencies.
This latest development only came up after oil marketers accused them of taking all their crude to the international market and leaving the local refineries unserviced.
Aliko Dangote, Chairman of the Dangote Group and other officials, had also said that it was unable to produce cheaper fuel for Nigerians because the IOCs were not selling to the local refineries.
Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced intentions to sanction any IOC that ignored its local crude supply commitment.
FG threatens to revoke IOC licenses
In related news, Legit.ng reported that the Nigerian government, through the NUPRC, warned international oil firms against diverting crude oil meant for local consumption.
The agency warned that it will deny oil exploration and production companies permits for oil export if they fail to prioritise the local market.