Despite facing feedstock challenges, Dangote Group is set to start crude oil production at its two Nigerian oil assets in the fourth quarter of 2024, according to reports by S&P Global Commodity Insights.
The company will commence production at Oil Mining Leases 71 and 72, starting with approximately 20,000 barrels per day before ramping up further in the first quarter of 2025. Dangote is currently seeking a floating production, storage, and offloading vessel with a capacity of 650,000 barrels of crude.
Dangote holds an 85% stake in West African E&P Venture, which has a 45% working interest in the blocks, alongside the state-owned Nigerian National Petroleum Company’s 55%. The fields, located in the shallow water of the Niger Delta, contain the Kalaekule and Koronama oilfields, with recoverable resources of almost 300 million barrels of oil and 2.3 trillion cubic feet of natural gas.
The $20 billion Dangote Refinery, operational since January, struggled with crude supply issues, forcing the company to import large volumes of US crude. However, with production commencement, the refinery may supplement its feedstock.
Data shows Dangote took just under 200,000 barrels per day of Nigerian crude in September and has not imported any US crude since mid-July. The company may acquire crude from other oil producers, including Libya, Senegal, or Brazil, as NNPC may only meet 60% of its crude demand.
This development marks a significant milestone for Dangote Group, enhancing Nigeria’s energy security and reducing dependence on imported refined products.
