Backward Integration: Dangote Group to Commence Crude Oil Production in Q4 2024-Report

Following its inability to get supply of  crude oil locally for its 650bpd refinery ,Dangote Group has prepared grounds  to change Nigeria’s energy landscape by commencing  crude oil production at its two Nigerian oil assets by the fourth quarter of 2024. This development will enhance the operations and enable it get crude oil seamlessly .

To facilitate production, Dangote is actively seeking a Floating Production, Storage, and Offloading (FPSO) vessel. Initial production from the company’s upstream projects in Oil Mining Leases (OMLs) 71 and 72 is expected to start at approximately 20,000 barrels per day, increasing to higher levels in the first quarter of 2025.

Strategic Partnerships and Investments

The Dangote Group holds a majority stake in West African E&P Venture, with a 45% working interest in the two blocks. The Nigerian National Petroleum Company (NNPC) owns the remaining 55%. First E&P operates OMLs 71 and 72, located in shallow waters of the southeastern Niger Delta.

Overcoming Crude Oil Supply Challenges

Dangote Refinery has faced challenges in securing a steady supply of crude oil, particularly from NNPC. To address this, the federal government has approved the sale of crude oil to Dangote in naira, simplifying transactions. The refinery has begun supplying petroleum products to NNPC and will soon start sales to local marketers.

READ ALSO: FG Directs IPMAN to Start Lifting Petrol Directly From Dangote Refinery

Transforming Nigeria’s Energy Sector

Aliko Dangote’s $20 billion investment in the Dangote Refinery aims to reduce Nigeria’s reliance on imported petroleum products. Once fully operational, the refinery will be the largest in Africa and Europe, transforming Nigeria’s energy landscape.