Dangote Plans Crude Oil Production to Power $20bn Refinery Project

The Dangote Group is poised to commence crude oil production to support its ambitious $20 billion refinery project.

The company plans to initiate production at its Nigerian oil assets, specifically Oil Mining Leases (OMLs) 71 and 72, in the fourth quarter of 2024.

This move comes after overcoming initial crude supply challenges with international oil companies (IOCs).

The OMLs 71 and 72 are strategically located in the shallow waters southeast of the Niger Delta, just 22 kilometers from the onshore Bonny terminal.

These blocks encompass the Kalaekule and Koronama oilfields, which were first discovered in 1966. Shell began production there two decades later, with output peaking at 21,000 barrels per day in 1999 before declining in 2003.

According to S&P Global Commodity Insights, these fields hold substantial recoverable resources, estimated at nearly 300 million barrels of oil and 2.3 trillion cubic feet of natural gas.

Production is anticipated to start in 2026, with an expected output of 43,000 barrels of oil equivalent per day by 2036. This potential production capacity underscores the strategic importance of these assets in bolstering Dangote's refinery operations.

To facilitate this production, Dangote Group is actively seeking a Floating Production Storage and Offloading (FPSO) vessel with a capacity of 650,000 barrels.

This vessel will play a crucial role in producing and storing crude oil, thereby enhancing the refinery's operations. The company's stake in West African E&P Venture, which holds a 45% working interest in the blocks, further solidifies its commitment to this venture.

The remaining 55% is owned by the state-owned Nigerian National Petroleum Company (NNPC), with First E&P operating the OMLs.