Chinese state energy major PetroChina has been waiting to unload a cargo of U.S. crude at Nigeria's giant new refinery for nearly a month due to payment issues, according to four trading sources and shipping data.
The impasse highlights difficulties the $20 billion plant
funded by Africa's richest man Aliko Dangote faces in its aim to be the biggest
refinery on the continent and in Europe when it reaches full capacity this or
next year.
Dangote aims to reverse the trend by which the oil-rich
country exports its crude but almost totally relies on imports of fuel and
other refined products.
The 2-million-barrel West Texas Intermediate (WTI) crude
cargo shipped by PetroChina onboard supertanker Maran Mira has, however, been
floating off Nigeria since March 28, shipping data on LSEG and Kpler showed.
The completion of the oil sale from PetroChina to Dangote
has been delayed as the refinery has yet to issue a letter of credit to the
Chinese trader, one source familiar with the matter said.
A letter of credit is the most common form of trade finance.
A buyer's bank sends a letter to the seller's bank guaranteeing payment to the
seller once goods arrive.
PetroChina was also not keen to receive oil products as
payment, one of the ways that Dangote has been paying for its crude, the source
said.
Two of the sources also told Reuters that the refinery has
had difficulty accessing dollars through the Nigerian government, with the
naira's slide against the U.S. dollar as global oil prices have risen straining
Nigeria's finances.
The government did not immediately respond to a request for
comment and a Dangote executive did not directly address the issue in comments
to Reuters.
PetroChina has another 2 million barrels of WTI crude
onboard supertanker Kondor that is making its way to Nigeria, according to
another source and LSEG shiptracking data.
Potential sellers of U.S. WTI crude to Dangote have been
confronted with difficult payment terms: either a 60 to 90 credit or an
exchange of refined products for the crude oil, three of the sources said.
Credit terms for oil deals are typically 30 days.
PetroChina did not respond to a Reuters request for comment.
A shipbroker estimated that the ship is incurring demurrage
costs of around $65,000 a day.
Dangote group executive Edwin Devakumar told Reuters that
seeking favourable sale prices and credit terms were normal business practices.
"If someone gives me one year credit, I'll grab it and
if not, I'll negotiate the best possible deal," he said. "When you go
to a shop to buy something ... You'll try the best possible deal and I do the
same".
"We are not delayed. If someone's business is delayed,
he is not giving us a good deal," Devakumar said, without specifically
addressing the issue with PetroChina.
RAMPING UP
The refinery started operations in January and has reached
half its capacity in recent weeks but a further increase is being slowed by its
need to borrow billions of dollars in working capital to be able to buy large
volumes of crude, trading sources said.
Devakumar declined to comment on the current run rates at
the refinery.
The facility is importing around 10 crude oil cargoes a
month, two traders said, roughly half the capacity of 650,000 barrels per day
(bpd) it seeks to reach this year or next, which would make it the largest
refinery in Africa and Europe.
The amount of Nigerian and U.S. crude discharged at Dangote
totalled 8.4 million barrels in March and 5.4 million barrels so far in April,
Kpler data showed. Another 1 million barrels of Nigerian crude is expected to
arrive on April 27.
Trafigura, Mercuria, Vitol, Shell and NNPC were among
Dangote's suppliers of crude last month, according to Kpler. Reuters
0 comments:
Post a Comment