The Dangote Group has recorded its first oil from upstream assets and is aiming to begin pumping marketable crude in the coming weeks, according to the Vice President of its oil and gas division, Devakumar Edwin.
Speaking in an interview with Platts, a division of S&P Global Energy, Edwin revealed that the company had started testing crude from its Niger Delta licences and had secured a drilling rig to commence a new drilling campaign in the mature basin.
The Dangote-backed project is currently producing about 4,500 barrels of oil per day from the Kalaekule field located on Oil Mining Lease 72. The production follows the finalisation of a long-awaited start-up that began in December 2025.
According to the Chief Executive Officer of Dangote’s upstream joint venture, West African E&P, Olajumoke Ajayi, production from the field is expected to increase to about 15,000 barrels per day within the next month.
Dangote holds an 85 per cent stake in the upstream venture, also known as WAEP. The company has a 45 per cent working interest in Oil Mining Leases 71 and 72, while the state-owned Nigerian National Petroleum Corporation holds the remaining stake. WAEP’s minority partner, First E&P, operates the assets.
Edwin explained that the company had opened a well and commenced standard testing operations, which are expected to be completed within three to four weeks.
“We have opened a well and begun standard testing, which should be completed in the next three to four weeks, maximum,” he said, adding that the firm would ramp up production once testing is completed and additional wells are drilled.
The licences are located in shallow waters southeast of the Niger Delta, approximately 22 kilometres from the Bonny crude export terminal. Oil discoveries on the blocks date back to 1966, while WAEP acquired the assets from Shell in 2015.
Production from the fields previously peaked at about 21,000 barrels per day in 1999 before declining in 2003.
The Chief Executive Officer of the Dangote refinery, David Bird, said the upstream project could provide a stable crude supply source for the company’s refinery, which recently reached its full nameplate capacity of 650,000 barrels per day.
Bird added that the company is also exploring the establishment of its own shipping operations to reduce logistics costs and strengthen crude supply reliability.
He said integrating indigenous production with Dangote-owned vessels could create a fully integrated supply chain for the refinery.
However, Bird noted that while the refinery may purchase crude from the upstream venture, such transactions would depend on commercial viability.
“Dangote has interests in upstream; we will continue to grow that, but that doesn’t necessarily mean that it won’t be arm’s length at every phase,” he said.
He declined to comment on whether the company plans to participate in Nigeria’s ongoing oil block bid round, which involves more than 50 assets.
Forecasts by S&P Global Energy CERA indicate that production from OML 71 and OML 72 could reach a plateau of about 43,000 barrels of oil equivalent per day by 2036. However, this would still represent only a fraction of the Dangote refinery’s crude requirements.
The refinery operated at an average utilisation rate of 94 per cent in March, according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
By 2028, the company plans to more than double the refinery’s processing capacity as it expands its operations.
Shipping data from S&P Global Commodities at Sea shows that the refinery has been supplementing Nigerian crude with supplies from the United States and Angola.
In April alone, the refinery is expected to process four additional crude grades as it continues to expand its crude basket beyond the roughly 40 grades it has already processed.
Edwin also said the Nigerian National Petroleum Company Limited is expected to supply about half of the refinery’s crude needs in the coming months through a combination of naira- and dollar-denominated sales.
Nigeria’s crude oil production remains below the government’s target of two million barrels per day for 2026. According to the Nigerian Upstream Petroleum Regulatory Commission, national output stood at about 1.38 million barrels per day in March, largely constrained by underinvestment, crude theft and limited exploration activities.
