Dangote Group has made a notable move into upstream oil, with initial crude output already flowing from its Niger Delta fields as it works toward feeding its refinery with internally sourced supply.
Devakumar Edwin, Vice President of the company’s oil and gas arm, confirmed that early testing is underway, with plans to transition into full production in the coming weeks.
From the site, he added that drilling activity is intensifying, and a rig has already been secured to support further expansion.
The Kalaekule field, situated within Oil Mining Lease 72, is currently producing about 4,500 barrels daily.
As reported by Punch Newspaper, Olajumoke Ajayi, head of the upstream joint venture West African E&P, indicated that output could climb to 15,000 barrels per day within a month as operations stabilize.
Dangote holds an 85% stake in the upstream venture, while the Nigerian National Petroleum Corporation retains ownership interests in the oil blocks.
Crude oil was first discovered in these fields in the 1960s, with production reaching its peak in the late 1990s before declining in the early 2000s.
The assets were eventually acquired in 2015, setting the stage for renewed development.
Moving into crude production is not only a strategic decision for the Dangote refinery but also a necessary one.
The facility has faced supply challenges in the past, especially during disputes with the national oil company over pricing terms.
At one point, crude was priced in foreign currency, making imports more attractive than sourcing locally.
Reports in October last year suggested that Dangote intended to commence its own crude production before the end of 2025.
Earlier projections had placed the start of production in the fourth quarter of 2024.
The push into exploration followed a two-month standoff over crude supply between Dangote and the Nigerian National Petroleum Corporation (NNPC).
An S&P Global report noted that Dangote’s Niger Delta assets, including Oil Mining Leases 71 and 72, were expected to begin production and potentially reach up to 40,000 barrels per day.
The prolonged supply dispute also affected refinery operations this year, with CEO David Bird stating that crude allocations from the Nigerian government had been largely insufficient.
Despite this, the refinery confirmed receiving its largest shipment yet from the NNPC after securing ten cargoes in March.