<\/p>\n
Billionaire Aliko Dangote\u2019s giant refinery in Nigeria is running at full capacity and maximising supplies of diesel and jet fuel to Europe to benefit from surging profit margins.<\/p>\n
\u201cRight now we\u2019re very much maximising our diesel, but the jet is still extremely significant from a yield perspective,\u201d David Bird, chief executive officer of Dangote Petroleum Refinery and Petrochemicals FZE, said in an interview. \u201cRest assured you\u2019re going to see a massive amount of aviation fuel still making its way to Europe.\u201d<\/p>\n
Middle East oil-product supplies have cratered since the start of the war, choking off vital diesel and jet fuel shipments to Europe, and Dangote has stepped in to help fill the gap.<\/p>\n
Africa\u2019s largest refinery reached full production shortly before the start of the US-Israel war on Iran on February 28, putting it in a position to help replace disrupted fuel supplies to Europe while cashing in on soaring margins. The timing also demonstrates its profit potential ahead of its Sept. 14 initial public offering, Africa\u2019s biggest share sale.<\/p>\n
Maximising production of fuels like diesel is especially attractive for refiners right now, with the premium the fuel fetches over crude at the highest in at least 15 years.<\/p>\n
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\u201cWe are running flat out at 700 000 barrels a day right now as we speak,\u201d Bird added, touting the refinery\u2019s capability to run the gamut of crude grades and to prioritise the fuels that the market deems most valuable.<\/p>\n
The business has been taking advantage of skyrocketing demand for diesel that\u2019s driven prices to record levels, and Dangote can quickly fine-tune the proportion of products it makes from crude, Bird said.<\/p>\n
The growth strategy Dangote has outlined ahead of the listing includes doubling refining capacity to 1.4 million barrels a day by building a second crude processing unit at the site by 2029.<\/p>\n<\/p>\n
Sourcing that amount of crude, currently just under Nigeria\u2019s entire daily output, won\u2019t be a problem, according to Bird. The refinery has processed Cawthorne, a new domestic grade of oil, and recently used supply from the United Arab Emirates, while West Africa alone pumps enough to keep it supplied, he said.<\/p>\n
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\u201cWe\u2019ve got 3.5 million barrels a day of crude production in our backyard,\u201d he said.<\/p>\n
The company is \u201cextremely bullish\u201d on refining margins over the medium term, but would be concerned if the Iran war drags on indefinitely, Bird said.<\/p>\n
\u201cIt\u2019s a supply crisis and at some point demand has to equal supply,\u201d he said. \u201cWe don\u2019t want that demand destruction. That won\u2019t be beneficial to anyone.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Nigerias #giant #oil #refinery #runs #flat #Europe #fuelled<\/p>\n","protected":false},"excerpt":{"rendered":"
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