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Finally, Dangote refinery set to commence operations as first crude shipment arrives

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Nigeria’s privately-owned Dangote refinery has received its first cargo of 1 million barrels of crude oil from Shell International Trading and Shipping Co. (STASCO).

In a statement released on Friday, Dangote Group said that the first of six million barrels of crude that would allow the refinery to make its first run came from Agbami, a deep water field operated by Chevron (CVX.N).

This will pave the way for the refinery to begin production of Premium Motor Spirit, diesel, aviation fuel, and liquefied Petroleum Gas.

The refinery was set to begin production in August but failed to. This raised concerns, as it had missed multiple deadlines over the years.

An agreement was signed in November by Nigeria’s state oil company, NNPC Ltd, to begin supplying the Dangote refinery with up to six cargoes of crude oil beginning this month. NNPC owns 20% of the refinery.

Nigeria is the largest oil producer in Africa, yet it frequently faces fuel shortages. It imports roughly 33 million litres of petroleum products per day, and spent $23.3 billion last year. None of Nigeria’s publicly owned refineries has worked to capacity for years, despite several investments to revive them. The failure of both the previous and current governments has contributed to the high level of national anticipation surrounding the Dangote refinery.

“Our focus over the coming months is to ramp up the refinery to its full capacity,” Dangote was quoted as saying in the statement.

Nigeria increased its output by 60,000 barrels per day to produce 1.49 million barrels of oil per day in October, the most in almost two years. Through a joint venture, the West African nation has introduced a new grade of crude known as Nembe as it increases its oil output.

More than 135,000 permanent jobs and 12,000 megawatts of electricity are anticipated to be generated by the Dangote refinery. Additionally, Nigeria would save $25–30 billion in foreign exchange annually. It is anticipated to bring $10 billion annually into the economy.

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Nigerian centra bank’s N1trn OMO bills oversubscribed

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The Central Bank of Nigeria (CBN) has issued N1.053 trillion (680 million dollars) in short-term instruments in the recently concluded sale of government securities.

The sale is a component of CBN’s liquidity management exercise, according to a statement released on Sunday night by Mrs. Hakama Sidi, Acting Director of the Corporate Communications Department.

The apex bank’s N500 billion offer at the Open Market Operations (OMO) auction was oversubscribed, according to Sidi. Foreign investors accounted for 79% of all bids, or 530 million dollars. The auction was the first since last week’s Monetary Policy Committee (MPC) meeting, which was followed by a virtual meeting with international portfolio investors.

Sidi claims that Olayemi Cardoso, the governor of the CBN, utilised the two sessions to establish a comprehensive plan aimed at reducing inflation, stabilising the currency rate, and boosting trust in the banking sector and the overall economy.

The apex bank now enjoys a high degree of confidence from investors, she added, and the management of the CBN was hopeful that its monetary policy initiatives were starting to have a good impact.

Cardoso, in the meantime, emphasised in the investor meeting the prospects for a steady rise in the CBN’s foreign exchange reserves. He gave them assurances about increased market liquidity and the quick resolution of the outstanding backlog of legitimate FX transactions.

“The CBN is committed to supporting price stability by taking the necessary measures to increase liquidity in the foreign exchange markets sustainably.

“Our focus is on building a fully functioning market that allows smooth entry and exit for investors,” he said.

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Partners ‘willing to walk away,’ US warns Tanzania over gas project delays

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Tanzania’s much-awaited, multimillion-dollar liquefied natural gas project is facing impending investor withdrawals from the United States, if delays caused by negotiating technicalities persist, the country has warned.

 

Companies like Exxon Mobil, who have been pushing the deal with Tanzanian authorities, have reached a point where they are now “willing to walk away,” US Deputy Assistant Secretary of State Joy Basu told journalists.

 

Basu, whose portfolio in the Joe Biden administration includes overseeing economic and regional affairs in Sub-Saharan Africa cautioned that “there is LNG in lots of places around the world now, and for Tanzania the window for this particular investment is closing fast. Such windows do not remain open forever.”

 

In meetings with Tanzanian government officials during the week to monitor the development of a US-Tanzania commercial dialogue that was initiated in October of last year, she stated that the project’s status was a top priority.

 

One of many international companies involved in the LNG project in southern Tanzania is Exxon Mobil, headquartered in Houston, Texas. The project’s estimated cost increased from $30 billion in 2014 to $42 billion by the previous year.

 

The project’s other partners include the state-owned Tanzania Petroleum Development Corporation, Exxon Mobil, Pavilion Energy (Singapore), Medco Energi (Indonesia), and Britain’s Shell and Norway’s Equinor, which have been designated as joint main operators.

 

She said that the project’s status was a major priority during meetings with Tanzanian government representatives this week to track the progress of a US-Tanzania commercial dialogue that was started in October of last year.

 

In order to expedite the development of its natural resources, the government intends to work with China’s Cnooc Ltd. to jointly explore for oil and gas in two offshore blocks that are owned by Tanzania Petroleum Development Corp., a state-owned company.

 

Since a downturn in 2020 when it 57.1 billion cubic feet of natural gas, a decline from 63.8 billion cubic feet the year before, the continent’s search for hydrocarbons has increased gradually as European countries look to diversify their energy sources and reduce their reliance on Russian gas.

 

Apart from the established main gas producing countries like Nigeria, Algeria, and Egypt, other African nations like Tanzania have been rising as potential players in the natural gas industry.

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