Dangote Refinery Mulls Crude Oil Production Amidst Shortfall From NNPC

The $20 billion Dangote Refinery is planning to produce crude oil from it two oil fields in Bonny, Rivers state.

According to S & P Global Community reports, the decision was taken by the Refinery following shortfall of crude oil supply from the Nigerian National Petroleum Company Limited, NNPCL.

The company owned by Africa’s Riches Man, Aliko Dangote is currently eyeing the fourth qaurter of this year to start crude oil mining from its two Niger Delta Upstream in Oil Mining Leases 71 and 72starting with about 20,000 barrels per day before the end of the year, with future plan to increase production.

The magazine reports that President Bola Ahmed Tinubu had recently directed the NNPCL to supply Dangote refineries with 400,000 barrel of crude per day in the naira-for crude-deal as part of the federal government’s efforts to enhance adequate fuel supply in the country.

The deal finally kicked off this month.

However, sources said the refinery had only received 200, 000 barrel of crude per day since it began production this year, creating a huge shortfall for the petrochemical refinery which aims to become major fuel producer in Africa and Europe.

The management of the refinery had earlier said it will source crude from the United States and Europe to augment local crude supply from the NNPCL.

Also, the decision to start crude oil mining in its Niger Delta Upstream Project will further enhance adequate feedstock for the refinery, sources in the company said.

“The company source said production at the company’s two Niger Delta upstream projects in Oil Mining Leases 71 and 72 would start at around 20,000 b/d, before ramping up further in the first quarter of 2025,” the report said.

The report stated that Dangote is currently seeking a floating production, storage and offloading vessel with a capacity of 650,000 barrels of crude.

The company, it was learnt, holds an 85 per cent stake in West African E&P Venture, which in turn has a 45 per cent working interest in the two blocks, alongside the state-owned Nigerian National Petroleum Company’s 55 per cent.

The other stakeholder in West African E&P is Nigerian upstream player, First E&P, which operates OMLs 71 and 72.

“The licences are located in the shallow water in the southeast of the troubled Niger Delta, just 22 km from the onshore Bonny terminal. They contain the Kalaekule and Koronama oilfields.”