Business
Dangote Refinery To Disrupt Europe’s Oil Industry, Says OPEC
The Organisation of Petroleum Exporting Countries (OPEC) has indicated that the products from Nigeria’s Dangote Refinery, the world’s largest single-train refinery, will exert significant pressure on Europe’s oil industry, particularly impacting the Northwest Europe (NWE) gasoil market.
According to OPEC’s June 2024 Oil Market Report, the Dangote Refinery is expected to be one of the top suppliers of diesel and jet fuel, a shift that experts believe will positively influence the Nigerian economy. The refinery’s increased production, along with strong supplies from the Middle East and Mexico’s Olmeca Refinery, will likely challenge the performance of the NWE gasoil market in the mid-term.
Europe, one of the largest global purchasers of refined petroleum products, has been relying on imports from Asia and the U.S. following the European Union’s ban on Russian diesel. Owned by Africa’s richest man, Aliko Dangote, the 650,000 barrels per day (bpd) refinery is positioning itself to penetrate the European market, especially after international oil companies halted crude oil supplies.
Dangote Industries Limited’s Vice President of Oil and Gas, Devakumar Edwin, confirmed that the refinery has already exported its first jet fuel cargo to Europe and is rapidly scaling production. The refinery has exported 90% of its 3.5 billion liters of jet fuel and diesel to Europe, citing a lack of support from the Nigerian government.
BP is currently transporting its first jet fuel cargo from Dangote to Rotterdam, following the award of a 120,000 metric tonnes tender at the end of May. Despite a slight decline in the jet/kerosene crack spread in Rotterdam against Brent in June, OPEC expects European jet/kerosene demand to rise as air travel activities pick up in the coming months.
The Dangote Refinery’s impact on the European oil industry is expected to be significant, with experts predicting a positive influence on the Nigerian economy. As the refinery continues to reshape global oil dynamics, its exports are likely to challenge the performance of the NWE gasoil market in the mid-term.
Nigerian banks’ rush to upgrade their core banking systems has caused confusion and frustration for many customers. With banks upgrading to more secure software, the lack of communication and customer support has left millions unable to access their funds, sparking questions about the bank’s commitment to customer welfare.
Dr. Uju Ogubunka, President of Bank Customers Association of Nigeria (BCAN), emphasized the severe impact of these disruptions, stressing the need for better communication and customer preparedness during such transitions. Banks must strike a balance between technological upgrades and customer service to retain trust, especially in an economy facing devaluation pressures.
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As Nigeria commemorates its 64th Independence anniversary, the stark contrast between celebration and the persistent challenges of corruption, mismanagement, and unfulfilled promises becomes evident.
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In a significant blow to Scotland’s energy sector, the 100-year-old Grangemouth refinery is set to close in 2025, citing its inability to compete with modern plants in Africa, Asia, and the Middle East. The refinery’s operator, Petroineos, announced the closure, which will result in the loss of 400 jobs.
Located in Scotland, Grangemouth refinery has been in operation since 1924, making it the country’s oldest and only refinery. However, despite its rich history, the refinery has struggled to remain competitive in the face of mounting global competition. Petroineos, a joint venture between PetroChina Internation al London (PCIL) and INEOS Group, a British chemicals firm founded by billionaire Sir Jim Ratcliffe, has invested $1.2 billion in the refinery since 2011.
However, the company has incurred significant losses, totalling over $775 million during the same period. According to Petroineos, the refinery is currently losing around $500,000 per day and expects a $200 million loss in 2024.
The company’s Chief Executive, Frank Demay, stated that the market for petrol and diesel fuels is expected to shrink further due to the upcoming ban on new petrol and diesel cars within the next decade. “Grangemouth is increasingly unable to compete with bigger, more modern and efficient sites in the Middle East, Asia and Africa.
Due to its size and configuration, Grangemouth incurs high levels of capital expenditure each year just to maintain its licence to operate,” Demay explained. The closure of Grangemouth refinery marks a significant shift in the global oil refining landscape, with modern and efficient plants in Africa, Asia, and the Middle East gaining a competitive edge. The Dangote Refinery in Nigeria, one of the largest refineries in Africa, may have contributed to the decline of Grangemouth refinery.
The refinery will be converted into a fuel import terminal, ensuring Scotland’s energy needs are still met. However, the closure raises concerns about the country’s energy security and the impact on local communities.
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