The Dangote Group says it has recorded its first oil output from its upstream operations and is gearing up to commence commercial crude production within weeks.
Speaking in an interview with Platts, a division of S&P Global Energy, the Vice-President of the Dangote Group, Devakumar Edwin, confirmed that initial testing has already started on crude from the company’s Niger Delta oil licences.
He explained that production is currently in the testing phase and will soon scale up. “We have opened a well and begun standard testing, which should be completed in the next three to four weeks maximum,” he said.
“After that point, oil can start to be pumped in larger volumes, and the company can begin work on drilling new wells.”
The Chief Executive Officer of the Dangote Petroleum Refinery, David Bird, also said the upstream operations are expected to strengthen crude supply to the refinery and improve stability.
“Alongside its upstream interests, the company is seeking to establish its own shipping presence to help reduce logistics costs and improve the reliability of its crude sourcing,” he said.
“Combined with WAEP’s indigenous production, Dangote-owned vessels could offer the refinery a fully integrated and attractive source of stable crude supply.”
He added that the refinery would take crude deliveries when commercially viable. “Dangote has interests in upstream, we will continue to grow that, but that doesn’t necessarily mean that it won’t be arms length at every phase,” he said.
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The company noted that its joint venture partners are also focused on maximizing value from production.
Regulatory authorities, including the Nigerian Upstream Petroleum Regulatory Commission, and Dangote Refinery did not respond to requests for comments at the time of filing this report.
The development is seen as a potential boost to crude supply stability for the refinery, which has previously faced challenges in sourcing feedstock. Earlier, the Nigerian National Petroleum Company Limited allocated seven crude cargoes to the refinery for May, up from five in previous months.