Next big move: Dangote to boost crude production with two oil blocks

The Dangote Group is preparing to begin production at its two oil fields in Nigeria by the fourth quarter of 2024, following several months of disruptions in crude supply.

According to S&P Global Commodity Insights, the company plans to launch production at its upstream projects in Oil Mining Leases 71 and 72 in the Niger Delta, initially producing around 20,000 barrels per day.

This output is expected to increase further in the first quarter of 2025.

Dangote Gears Up for Oil Production Boost With Two Major Nigerian Assets
Source: UGC

Additionally, Dangote, which operates the prominent 650,000 barrels-per-day refinery in Lagos, is in search of a floating production, storage, and offloading vessel capable of holding 650,000 barrels of crude.

The company holds an 85% stake in West African E&P Venture, which, in turn, owns a 45% working interest in two oil blocks, while the Nigerian National Petroleum Company (NNPC) controls the remaining 55%.

First E&P, a Nigerian upstream operator, is the other shareholder in West African E&P and is responsible for operating Oil Mining Leases (OMLs) 71 and 72.

These blocks are located in shallow waters in the southeastern part of the Niger Delta, about 22 kilometres from the Bonny onshore terminal.

The area includes the Kalaekule and Koronama oilfields, where oil was first discovered in 1966.

Shell began production there in the mid-1980s, with output peaking at 21,000 barrels per day in 1999 before declining by 2003.

Despite the decline, the fields still hold recoverable reserves of nearly 300 million barrels of oil and up to 2.3 trillion cubic feet of natural gas.

The upcoming start of production at Oil Mining Leases 71 and 72 indicates that the Dangote refinery may soon boost its crude supply, following months of supply challenges.

The $20 billion refinery was built to eliminate Nigeria's long-standing reliance on imported refined products. So far, it has produced gasoline, diesel, jet fuel, gasoil, and naphtha for both domestic consumption and export.

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Source: Legit.ng