Aliko Dangote, the Nigerian industrialist behind the country’s first private oil refinery, is now expanding into crude oil exploration.
Initially scheduled for late 2024, the launch of Dangote’s oil production is now set to begin in 2025, according to a report by S&P Global Commodity Insights.
The report highlights that production at Dangote’s two oil properties, located in the Niger Delta’s Oil Mining Leases (OMLs) 71 and 72, will commence at around 20,000 barrels per day (bpd) in early 2025, with plans to increase output further in the first quarter of the year.
A senior official at the Dangote refinery confirmed the timeline, stating, “Yes, I saw the S&P report. Our company will indeed begin crude oil production to support the refinery, but it will start in the first quarter of 2025.”
The Dangote refinery, which was commissioned in 2023, has faced delays in distributing refined petrol due to disputes with the Nigerian National Petroleum Company Limited (NNPCL).
Allegations surfaced that NNPCL had restricted Dangote’s access to locally produced crude by either pricing it above market rates, selling it in U.S. dollars instead of the Nigerian Naira, or claiming crude was unavailable.
As a result, the refinery had to source oil from international markets, including Brazil and the United States, at higher costs.
In response to these challenges, Dangote has decided to commence crude production at the Niger Delta sites to ensure a reliable supply for his refinery.
Additionally, the company is seeking a floating production, storage, and offloading (FPSO) vessel with a capacity of 650,000 barrels of petroleum, which will aid in the storage and transportation of crude oil.
This move marks a significant step in Dangote’s growing involvement in Nigeria’s oil sector, further boosting the nation’s potential for self-sufficiency in petroleum production.
