NNPC in Talks With Oil Producers to Boost Crude Supply to Dangote Refinery
- NNPC Ltd has begun discussions with international and local oil producers to increase crude oil production
- The talks aim to improve crude supply for domestic refining, especially for the Dangote Petroleum Refinery
- Rising tensions around the Strait of Hormuz have triggered fears that global oil prices could surge sharply
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The Nigerian National Petroleum Company (NNPC) Limited has begun high-level discussions with oil producers as it seeks to increase crude oil production amid changes in Nigeria’s fuel supply landscape.
Source: UGC
Sources familiar with the development told The Sun that the talks involve international oil companies and indigenous producers and are aimed at improving crude supply for domestic refining, particularly for the Dangote Petroleum Refinery.
The move comes as competition for crude feedstock intensifies following the refinery’s growing influence in the local petroleum market.
NNPC to ensure crude availability for local refineries
Sources within NNPC Ltd disclosed that the initiative is designed to boost crude availability for local refiners and help manage pressure on petrol prices.
“NNPC Limited recognises that the Dangote Refinery is a strategic national asset, and ensuring its optimal operation is important for Nigeria’s energy security,” the sources told Daily Sun.
They explained that under existing agreements, the national oil company continues to facilitate crude supply to the refinery, even as temporary supply constraints persist.
To address the situation, the company said it is working with joint venture partners and production operators to improve domestic crude output, which could increase the volume available for local refining.
The source added that the national oil company’s goal is to support domestic refining capacity and ensure Nigeria derives maximum value from its crude resources.
Oil market volatility may affect Nigerians
NNPC Ltd also acknowledged that global oil market volatility could have significant effects on Nigerians, especially during periods of geopolitical tension.
According to the sources, the company is monitoring international developments and working with regulators including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to ensure adequate crude supply and product availability.
The state oil firm also said it is collaborating with domestic refiners, including the Dangote Refinery, to maintain a steady supply of crude for local processing.
In addition, NNPC Ltd noted that it is expanding gas development projects as part of efforts to diversify Nigeria’s energy mix and reduce the country’s exposure to fluctuations in global oil prices.
“Our focus remains clear: to safeguard national energy security and ensure Nigerians continue to have access to petroleum products despite global market disruptions,” the sources said.
IEA to release 400MMBPD
Meanwhile, the International Energy Agency has announced plans to release 400 million barrels of oil to help stabilise global supply as tensions escalate in the Middle East.
The agency’s Executive Director, Fatih Birol, said the decision followed a unanimous agreement among member countries and represents the largest emergency oil release in the organisation’s 50-year history.
“IEA countries will be making 400 million barrels of oil available to the market to offset the supply lost due to the effective closure of the Strait of Hormuz,” Birol said.
He noted that the release is intended to ease the immediate impact of supply disruptions but stressed that long-term stability depends on reopening the strategic waterway, which handles about one-fifth of the world’s oil shipments.
Source: Getty Images
The development comes after Iran’s military warned that crude prices could climb to $200 per barrel following attacks on three vessels in the strait.
The situation has raised concerns in global energy markets and prompted discussions among members of the Group of Seven about coordinated releases from emergency oil reserves.
FG suspends petrol importation
Legit.ng earlier reported that the federal government has suspended petrol importation, bolstering Dangote Refinery's dominance in the fuel supply market.
Nearly 64% of Nigeria's petrol demand was met by Dangote Refinery as imports declined dramatically.
The Dangote Group planned a $750 million expansion to increase refinery capacity and revolutionise Nigeria's energy sector
Source: Legit.ng
