The Organisation of the Petroleum Exporting Countries (OPEC) has recognized the transformative impact of Nigeria’s Dangote Petroleum Refinery on the global Premium Motor Spirit (PMS) market, particularly in Europe. The 650,000-barrel-per-day facility, which began operations in January 2024, has significantly reduced Nigeria's reliance on imported fuel, while contributing to the international PMS supply.
Dangote Refinery's Contributions
- Production Milestone: The refinery began producing petrol in September 2024, marking a major shift for Nigeria, which had historically depended on imports to meet domestic fuel demands.
- Exports: Dangote Refinery exports petrol, diesel, and aviation fuel to countries across Africa and beyond.
- Market Shift: OPEC noted that increased gasoline production at the refinery is freeing up volumes in international markets, particularly in Europe, where adjustments in supply flow and new destinations are now required.
European Market Impact
OPEC’s Wednesday report highlighted:
- Reduced Imports to Nigeria: Dangote's operations have curtailed petroleum product imports from Europe to Nigeria.
- Gasoline Crack Spread: While Rotterdam's gasoline crack spread against Brent increased slightly due to robust exports, inventories at the Amsterdam-Rotterdam-Antwerp (ARA) hub remain high.
- Market Sentiment: The ongoing gasoline inventory build-up in the Atlantic Basin, coupled with winter-season demand pressures, is exacerbating bearish market sentiment in Europe.
Nigeria's Crude Oil Production Update
- Nigeria’s crude production averaged 1.507 million barrels per day (mbpd) in December, up from 1.477mbpd in November, according to OPEC’s secondary sources.
- The Nigerian government reported a slightly lower figure of 1.485mbpd for December, aligning with data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Dangote Refinery vs. Europe's Largest Facilities
The $20 billion Dangote Refinery surpasses Europe's largest refineries in capacity, including:
- Shell Pernis Refinery (Netherlands): 404,000bpd
- BP Rotterdam (Netherlands): 380,000bpd
- GOI Energy ISAB Refinery (Italy): 360,000bpd
- TotalEnergies Antwerp (Belgium): 338,000bpd
Global Implications
The Dangote Refinery’s scale and capacity are reshaping the global energy landscape. Its ability to refine 650,000bpd surpasses several major European refineries and positions it as a pivotal player in stabilizing supply, particularly for Africa and emerging markets.
This development not only strengthens Nigeria’s energy independence but also bolsters its standing as a critical player in global oil and gas production.
