The Dangote Refinery, Africa’s largest single-train refinery, is set to begin crude oil production soon following new developments from its upstream oil assets, according to a recent report by S&P Global.
The report revealed that Dangote’s Oil Mining Leases (OML) 71 and 72, located in the Niger Delta region, are scheduled to start pumping crude oil before the end of the year, with an expected output of up to 40,000 barrels per day (bpd).
“Dangote’s upstream assets in the Niger Delta, Oil Mining Lease 71 and 72, could soon provide another supply injection, with production expected to start this month and reach up to 40,000 b/d,” S&P Global stated.
This marks a significant milestone for Aliko Dangote’s energy conglomerate, as the new upstream production will enhance the refinery’s crude supply chain and reduce reliance on foreign feedstock. The report also noted that Dangote remains keen on expanding his upstream oil portfolio, further strengthening the company’s integrated energy operations.
Tackling Crude Supply Challenges
Since the refinery’s launch, securing a steady crude oil supply has been a major challenge. To address this, Dangote Group recently reached a landmark agreement with the Nigerian National Petroleum Company Limited (NNPC) under a “crude-for-naira swap deal.”
Under this arrangement, NNPC supplies Dangote with 14 crude oil cargoes or their equivalent value in U.S. dollars, while the refinery provides the same volume of gasoline and gasoil in naira. This swap mechanism helps stabilize domestic fuel supply and supports Nigeria’s local refining capacity.
In addition, The PUNCH reported that NNPC signed a two-year crude supply contract with the Dangote Refinery in August 2025, ensuring consistent feedstock delivery to the 650,000-barrel-per-day facility located in Lekki, Lagos.
Presidential Backing and Strategic Impact
The naira-for-crude arrangement was introduced by President Bola Tinubu in response to the refinery’s crude sourcing difficulties. The policy directed that a portion of Nigeria’s locally produced crude be allocated to domestic refineries, beginning with the Dangote facility.
Dangote has publicly thanked the president for the intervention, acknowledging its role in stabilizing crude prices and supporting refinery operations. However, the company also noted that intermittent shortages had previously forced it to import crude from the United States to maintain operations.
Boosting Nigeria’s Energy Security
With the commencement of crude production from its own oil fields, the Dangote Refinery is expected to achieve greater operational independence and increase domestic fuel output. The new supply is also projected to reduce Nigeria’s fuel import dependency, enhance foreign exchange savings, and strengthen the country’s energy security.
Industry observers believe that this development will mark a new chapter in Nigeria’s oil and gas sector, positioning the Dangote Refinery as a major player not just in refining but also in upstream oil production — a critical step toward achieving the nation’s energy self-sufficiency.
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