Dangote to begin crude oil production in N’Delta before year end

Dangote to begin crude oil production in N’Delta before year end

The Dangote Refinery is poised to commence crude oil production from its upstream assets in the Niger Delta before the end of the year, a report by S&P Global has revealed.

According to the report, operations at Oil Mining Leases (OML) 71 and 72 are expected to begin in the coming weeks, with output projected to reach 40,000 barrels per day.

“Dangote’s upstream assets in the Niger Delta, Oil Mining Lease 71 and 72, could soon provide another supply injection, with production expected to start this month and reach up to 40,000 b/d,” the report stated.

The development is seen as a strategic move to ease the refinery’s crude supply challenges, which have persisted since operations began at the 650,000-barrel-per-day facility in Lekki, Lagos.

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To address the shortfall, Dangote recently secured a crude-for-naira swap deal with the Nigerian National Petroleum Company Limited (NNPC), under which 14 cargoes of crude oil are exchanged for equivalent volumes of gasoline and gasoil in local currency.

The arrangement stems from a policy introduced by President Bola Tinubu last year, mandating that crude oil designated for domestic use be sold to local refineries, starting with Dangote’s.

Despite the intervention, the refinery has occasionally resorted to importing feedstock from the United States to sustain production, amid delays in transactions with local oil producers.

Group President, Aliko Dangote, has expressed interest in expanding the company’s upstream portfolio, even as analysts believe the planned production from OMLs 71 and 72 will help stabilize fuel output and strengthen supply.

Dangote to begin crude oil production in N’Delta before year end