Dangote Seeks Vessel for Oil Production in 2024

Dangote Group has announced its search for a floating production, storage, and offloading (FPSO) vessel with a capacity of 650,000 barrels to support its planned oil production.

The company anticipates beginning production at its two Nigerian oil assets, Oil Mining Leases (OMLs) 71 and 72, in the fourth quarter of 2024 (October to December), following earlier challenges in securing crude oil supplies from International Oil Companies (IOCs).

As reported by S&P Global Commodity Insights, Dangote is currently in pursuit of the FPSO to facilitate the production and storage of crude oil, which will enhance the operations of its refinery.

Dangote holds an 85% stake in West African E&P Venture, which itself has a 45% working interest in the two oil blocks, while the Nigerian National Petroleum Company (NNPC), a state-owned entity, holds the remaining 55%.

First E&P, a Nigerian upstream company, is the other partner in West African E&P and operates OMLs 71 and 72.

The blocks are situated in shallow waters in the southeastern region of the Niger Delta, a troubled area, and are just 22 km from the Bonny onshore terminal. These leases include the Kalaekule and Koronama oilfields.

The blocks were first discovered in 1966, with production commencing under Shell’s operation in the mid-1980s. Output peaked at 21,000 barrels per day in 1999 before declining in 2003.

S&P Global Commodity Insights notes that the fields contain recoverable resources of nearly 300 million barrels of oil and 2.3 trillion cubic feet (Tcf) of natural gas, predicting production could commence in 2026, potentially reaching 43,000 barrels of oil equivalent per day (boe/d) by 2036.

It also highlighted that the upcoming production start at OMLs 71 and 72 could allow the Dangote refinery to supplement its crude supply, following months of struggles with crude sourcing.