The Dangote Refinery is poised for a significant milestone as its upstream oil assets, Oil Mining Leases 71 and 72, are expected to commence production by the end of the year.
According to a report by S&P Global, the assets will produce approximately 40,000 barrels of crude oil per day, further solidifying the refinery’s production capacity.
This development comes as a welcome relief to the refinery, which has faced challenges in sourcing crude oil in the past. However, a recent breakthrough deal with the Nigerian National Petroleum Company Limited (NNPC) is expected to alleviate supply concerns. The NNPC has signed a two-year crude supply agreement with the Dangote refinery, ensuring a steady supply of crude to the 650,000-barrel-per-day facility located in Lekki, Lagos.
The deal, signed in August, is part of the “crude for naira” swap agreement, where NNPC supplies Dangote with crude oil in exchange for gasoline and gasoil in the local currency. This agreement is expected to stabilize crude supply and bolster fuel production at the refinery.
Dangote Refinery has been working to increase its production capacity, with plans to expand its capacity to 1.4 million barrels per day. The refinery has already made a significant impact on Nigeria’s economy, transforming the country from a fuel importer to a regional energy supplier and stabilizing the currency.
With the expected increase in crude oil production, the Dangote Refinery is set to play an even more critical role in meeting Nigeria’s fuel needs and potentially exporting surplus fuel to other countries.
