Dangote ready to go?
The news that the Nigerian National Petroleum Company (NNPC) intends to take a 20% stake in the $18 billion under-construction Dangote Refinery caused us to stop and consider what the impact of this would be. Then a couple of weeks later it was announced that NNPC will supply at least 300k b/d of crude to the 650 k b/d refinery. This is a bold move as it will bolster domestic supply security to the new refinery and guarantee an outlet for the country's crude. This comes at a time when there has been a general lack in up-stream investment in oil production facilities within the country, as well as the impact of recent OPEC+ cuts which have contributed to a steady fall in overall oil production in Nigeria in recent years. The country has the capacity to pump between 2.2-2.3 million b/d of crude and condensate, but output has averaged around 1.59 million b/d over the past 12 months.
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