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Why Ghana wants to import petroleum from Nigeria's Dangote Oil Refinery
Why Ghana wants to import petroleum from Nigeria's Dangote Oil Refinery
By: Nii Ammui Fio | 3 mins read
Ghana is considering turning its eyes from Europe to Nigeria for the importation of petroleum, according to the Chief Executive Officer of the National Petroleum Authority (NPA), Dr Mustapha Adbul Hamid.
During his address at the OTL Africa Downstream Oil Conference in Lagos, Dr Hamid pointed out that Dangote Oil Refinery would be engaged to provide this service should it be able to produce 650,000 barrels per day (bpd).
"If the refinery reaches 650,000 bpd capacity, all that volume cannot be consumed by Nigeria alone, so instead of us importing as we do right now from Rotterdam, it will be much easier for us to import from Nigeria and I believe that will bring down our prices," he said.
Executive Officer of the National Petroleum Authority (NPA), Dr Mustapha Adbul Hamid
The focus is to cut down the West African country's cost to import, which according to Dr Hamid, stands at approximately $400 monthly due to engagement with European contacts.
It is yet to be determined how much Ghana would be able to save should it pursue dealings with Dangote Oil Refinery.
Dangote Oil Refinery is a 650,000 barrels per day (BPD) integrated refinery project under construction in the Lekki Free Zone near Lagos, Nigeria. It is expected to be Africa’s biggest oil refinery and the world’s biggest single-train facility.
The Pipeline Infrastructure at the Dangote Petroleum Refinery is the largest anywhere in the world, with 1,100 kilometres to handle 3 Billion Standard Cubic Foot of gas per day. The Refinery alone has a 435MW Power Plant that is able to meet the total power requirement of Ibadan DisCo.
The Refinery will meet 100% of the Nigerian requirement of all refined products and also have a surplus of each of these products for export. Dangote Petroleum Refinery is a multi-billion dollar project that will create a market for $21 Billion per annum of Nigerian Crude. It is designed to process Nigerian crude with the ability to also process other crudes.
Importation of petroleum products into Ghana
The depreciation of the cedi has increased the cost involved in importing petroleum products into Ghana due to transactions being held in dollars.
As such, the Gold for Oil (G4O) Programme, an initiative of the Government of Ghana to use the existing BOG Domestic Gold Purchase (DGP) programme to provide import finance facilities to support the importation of petroleum products into Ghana was put in place.
The expectation was that a reduction in foreign exchange pressures, a reduction in premiums charged by international oil traders, and efficiency gains from the value chain would translate to lower ex-pump prices in the country.
According to the Bank of Ghana (BOG), under the G4O programme, dore gold produced and exported by companies with licensed small-scale concessions, including community mines through the PMMC, shall be purchased by the Bank of Ghana.
The bank said the purchased dore gold was used for the payment of petroleum products supplied to Ghana, either with the foreign exchange (FX) proceeds of gold sold or through a gold barter settlement with the petroleum suppliers.
The BOG has disclosed that as of December 31, 2023, the consolidated capitalised cost incurred on the Gold for Oil (G40) operations was GH¢2.43 billion.
OTL Africa Downstream Energy Week
The OTL Africa Downstream Energy Week is the continent’s leading downstream energy event for international organizations, policy makers, regulators, development organisations, operators, service providers and consumers in the downstream energy value-chain.
It incorporates a strategic conference, a trade and services exhibition and high-level networking opportunities, creating a first-rate business development and policy activation opportunity. Focus areas cut across the downstream petroleum supply chain, including refining, trading, shipping, tank storage, logistics, marketing, retail, lubricants, petrochemicals, gas, financial services, renewable energy, technology, power and policy.
This year's event is being held from October 28 to 31 at Oriental Hotels, Lagos, Nigeria.
