- The Dangote Group plans to start crude oil production in Q4 2024 to support its $20 billion refinery, seeking FPSO vessels
- Production will commence at Oil Mining Leases 71 and 72, with recoverable resources estimated at nearly 300 million barrels of oil
Dangote Group is preparing to begin crude oil production to support its $20 billion refinery. For this purpose, the company is seeking a floating production, storage, and offloading (FPSO) vessel with a capacity of 650,000 barrels.
Production is expected to begin at its two Nigerian oil assets, Oil Mining Leases (OMLs) 71 and 72, in the fourth quarter of 2024, following initial challenges in securing crude oil supply from International Oil Companies (IoCs).
According to S&P Global Commodity Insights, the FPSO will be essential for producing and storing crude oil, enhancing the operations of the Dangote refinery.
Dangote holds an 85% stake in West African E&P Venture, which has a 45% working interest in OMLs 71 and 72, while the Nigerian National Petroleum Company (NNPC) holds the remaining 55%.
First E&P, a Nigerian upstream company, is also involved as the operator of the blocks. The oil licenses are situated in shallow waters in the Niger Delta, near the Bonny terminal.
The Kalaekule and Koronama oilfields, located within the blocks, were discovered in 1966. Shell started production two decades later. Output peaked at 21,000 barrels per day in 1999 but declined by 2003.
The fields are estimated to hold recoverable resources of nearly 300 million barrels of oil and 2.3 trillion cubic feet of natural gas. Production is anticipated to begin in 2026, with a potential output of 43,000 barrels of oil equivalent per day by 2036.
The planned startup of production from OMLs 71 and 72 is expected to help Dangote resolve crude oil supply issues and provide a steady feedstock for its refinery operations.