Dangote Group has planned to enhance oil production in it’s refinery by seeking a floating production, storage and offloading, FPSO vessel with 650,000 barrels capacity for its planned oil production.
Dangote disclosed it’s looking forward to starting production at its two Nigerian oil assets – Oil Mining Leases, OMLs 71 and 72 – in the fourth quarter (October – December) of 2024, after encountering initial crude oil supply issues with International Oil Companies, IoCs.
According to S&P Global Commodity Insights, Dangote is currently seeking the FPSO to produce and store crude oil for the enhancement of its refinery operations.
The company holds an 85% stake in West African E&P Venture, which in turn has a 45% working interest in the two blocks, alongside the state-owned Nigerian National Petroleum Company’s 55%.
The other stakeholder in West African E&P is Nigerian upstream player First E&P, which operates OMLs 71 and 72.
The licenses are located in the shallow water in the southeast of the troubled Niger Delta, just 22 km from the onshore Bonny terminal. They contain the Kalaekule and Koronama oilfields.
Discoveries were first made on the blocks in 1966, and Shell began production there two decades later. Output peaked at 21,000 b/d in 1999, before declining in 2003.
Global Commodity Insights said that the fields hold recoverable resources of almost 300 million barrels of oil and 2.3 Trillion Cubic Feet, Tcf, of natural gas, adding that production could start in 2026, reaching 43,000 barrels of oil equivalent, boe/d by 2036.
It maintained that the imminent startup of production at OMLs 71 and 72 suggests the Dangote refinery could supplement its crude feedstock, after having faced months of crude supply issues.