The Dangote Group, known for the Dangote Refinery, is planning to venture into crude oil exploration due to feedstock challenges. Reports indicate that the group aims to start production at its two Nigerian oil assets by the fourth quarter of 2024. The production will commence at two Niger Delta upstream projects in Oil Mining Leases 71 and 72, beginning with around 20,000 barrels per day and increasing further by the first quarter of 2025.
The company is in search of 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 two blocks, alongside the state-owned Nigerian National Petroleum Company’s 55%. Another stakeholder in West African E&P is Nigerian upstream player, First E&P, operating OMLs 71 and 72.
The oilfields in the Niger Delta hold significant resources, with nearly 300 million barrels of oil and up to 2.3 trillion cubic feet of natural gas. The reports suggest that the Dangote refinery might enhance its crude feedstock with the startup of production at OMLs 71 and 72, addressing the crude supply challenges faced in recent months.
The refinery, built by Africa’s richest man, aims to reduce Nigeria’s reliance on imported refined products. Despite initial struggles in obtaining sufficient Nigerian crude, the facility has begun production and is looking to stabilize operations for high-volume petrol production. Data shows that Dangote imported Nigerian crude in September and might source crude from other producers like Libya, Senegal, and Brazil due to potential limitations in fulfilling its crude demand by NNPC.