Dangote to begin crude oil production before the end of 2024

Dangote Group, the owner of West Africa’s largest refinery, is set to begin crude oil production at its two Nigerian oil assets in the fourth quarter of 2024, according to a report by S&P Global Commodity Insights released on October 10.

 

The report, citing company sources, noted that Dangote is actively searching for a floating production, storage, and offloading vessel capable of holding 650,000 barrels of crude oil.

 

The company source said production at the company’s two Niger Delta upstream projects in Oil Mining Leases 71 and 72 would start at around 20,000 b/d, before ramping up further 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 located in shallow waters in the southeastern Niger Delta, approximately 22 km from the onshore Bonny terminal. The area contains the Kalaekule and Koronama oilfields.

 

Crude Oil Shortage Supply

Since the 650,000 barrel-per-day refinery began operations, Dangote has faced a crude oil supply crisis, particularly from the national oil company, NNPC.

 

As a result, the refinery has had to rely on imported crude from countries such as Brazil, the U.S., and others.

 

This issue worsened amid 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 to the ongoing dispute, the federal government approved the sale of crude oil to Dangote in naira, streamlining the transaction process and providing relief for the refinery.

 

To date, Dangote refinery has supplied petroleum products to the NNPC and is expected to begin sales to local marketers in the coming weeks, as the NNPC has ceased being the sole off-taker of Dangote fuel.

 

What you should know

Africa’s wealthiest individual, Aliko Dangote, completed the $20 billion Dangote Refinery, a landmark project with the capacity to process 650,000 barrels of oil per day.

 

Once fully operational, it will become the largest refinery across both Africa and Europe, with full capacity expected to be reached this year or next.

 

The refinery aims to significantly reduce Nigeria’s heavy reliance on imported petroleum products.

 

Although Nigeria is Africa’s top oil producer and most populous nation, it imports nearly all of its fuel due to insufficient refining infrastructure—a gap the Dangote refinery is set to address.

 

 

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