Dangote Group, the owner of West Africa’s largest refinery, is planning to commence crude oil production at its two Nigerian oil assets in the fourth quarter of 2024.
Gatekeepers News reports that the company, according to a report by S&P Global Commodity Insights released on October 10, is actively seeking a floating production, storage, and offloading vessel capable of holding 650,000 barrels of crude oil.
Production at the company’s two Niger Delta upstream projects in Oil Mining Leases 71 and 72 is expected to begin at around 20,000 barrels per day, with further ramping up anticipated in the first quarter of 2025.
Dangote Group holds an 85% stake in West African E&P Venture, which has a 45% working interest in the two blocks, while the Nigerian National Petroleum Company (NNPC) holds the remaining 55%.
Another key stakeholder in West African E&P is Nigerian upstream company First E&P, which operates Oil Mining Leases (OMLs) 71 and 72.
The licenses for these blocks are situated in shallow waters in the southeastern Niger Delta, approximately 22 km from the onshore Bonny terminal and contain the Kalaekule and Koronama oilfields.
Since the commencement of operations at the 650,000 barrel-per-day refinery, Dangote has encountered challenges in crude oil supply, particularly from the national oil company, NNPC. As a result, the refinery has had to depend on imported crude from countries such as Brazil and the U.S.
The situation was further exacerbated by tensions with international oil companies (IOCs), with Dangote accusing them of attempting to undermine the refinery’s success through price gouging and manipulation of crude sales. In response, the federal government approved the sale of crude oil to Dangote in naira, simplifying the transaction process and providing relief for the refinery.
Dangote refinery has supplied petroleum products to the NNPC and is expected to commence sales to local marketers in the coming weeks, marking a shift from NNPC being the sole off-taker of Dangote fuel.
