Nigeria 🇳🇬 Oil And Gas
The Dangote Group has officially commenced crude oil production from its upstream assets in the Niger Delta, marking a significant milestone in its strategic drive toward vertical integration across the energy value chain.
The company is targeting an initial output of 15,000 barrels per day (bpd) from the Kalaekule field as it accelerates efforts to secure a steady and cost-efficient crude supply for its refinery operations.
In a recent interview with Platts, a division of S&P Global Energy, Devakumar Edwin, Vice-President of the Dangote Group, confirmed that preliminary testing activities have begun on crude extracted from the company’s Niger Delta licences.
According to him, the testing phase—expected to be concluded within three to four weeks—will pave the way for scaled production and further drilling activities.
We have opened a well and commenced standard testing procedures, which should be completed within the next few weeks,” Edwin stated.
Following this phase, we anticipate ramping up production volumes and initiating the development of additional wells.”
Further insights were provided by Olajumoke Ajayi, Chief Executive Officer of Dangote’s upstream joint venture, West African E&P (WAEP).
She disclosed that the project is currently producing approximately 4,500 bpd from the Kalaekule field, located within Oil Mining Lease (OML) 72.
The field, which achieved long-awaited start-up in December 2025, is expected to reach its target output of 15,000 bpd within the coming month.
The Dangote Group holds an 85 percent equity stake in its upstream venture, while WAEP retains a 45 percent working interest in OML 71 and 72.
The remaining interests are held by the Nigerian National Petroleum Company Limited, with operational responsibilities managed by First E&P.
The oil assets are situated in the shallow offshore region of the Niger Delta, approximately 22 kilometres from the Bonny export terminal.
Originally discovered in 1966, the fields once achieved peak production levels of 21,000 bpd in 1999 before experiencing a gradual decline beginning in 2003.
David Bird, Chief Executive Officer of the Dangote Refinery, emphasized that the company’s upstream expansion is expected to play a critical role in enhancing crude supply security for the refinery.
He noted that the group is also exploring the establishment of its own maritime logistics infrastructure to further streamline operations and reduce dependency on third-party shipping.
“In addition to our upstream investments, we are actively working toward building an in-house shipping capability,” Bird explained.
“This will help lower logistics costs and significantly improve the reliability and efficiency of crude supply to the refinery.”
He added that while the refinery is positioned to receive crude from the new upstream operations, procurement decisions will continue to be guided by commercial viability and value optimization for all joint venture stakeholders.
This development is widely seen as a strategic move to address previous supply constraints that impacted refinery throughput.
In a related development, NNPC Limited recently announced plans to allocate seven crude cargoes to the Dangote Refinery in May—an increase from the five cargoes supplied in prior months—further underscoring efforts to stabilize feedstock supply.
Overall, the commencement of crude production from the Kalaekule field represents a pivotal step in Dangote Group’s ambition to create a fully integrated oil and gas ecosystem, enhancing Nigeria’s refining capacity while strengthening energy security and operational resilience.