Dangote Group has achieved first oil from its upstream assets and is aiming to start pumping marketable crude in the coming weeks, according to the Vice President of its oil and gas division, Devakumar Edwin.
Speaking to Platts, part of S&P Global Energy, in an interview from the premises of the Dangote Petroleum Refinery, Edwin disclosed that the company’s upstream venture had begun testing crude from its Niger Delta licences and had arranged a rig to begin a drilling campaign in the mature basin.
The Dangote-backed project is currently producing about 4,500 barrels per day from its Kalaekule field on Oil Mining Lease 72, following the finalisation of a long-awaited start-up in December 2025.
According to the Chief Executive Officer of Dangote’s upstream joint venture, West African E&P, Olajumoke Ajayi, output is expected to rise to 15,000 barrels per day within the next month.
Dangote holds 85 per cent in the upstream business, also known as WAEP, which in turn has a 45 per cent working interest in Oil Mining Leases 71 and 72. The balance is held by the state-owned Nigerian National Petroleum Corporation, while WAEP’s minority stakeholder, First E&P, operates the assets.
“We have opened a well and begun standard testing, which should be completed in the next three to four weeks, maximum,” Edwin said. He added that after testing, oil could begin to be pumped in larger volumes while the company proceeds with drilling new wells.
The licences are located in shallow water southeast of the Niger Delta, roughly 22 kilometres from the Bonny terminal. Discoveries were first made on the blocks in 1966, and WAEP acquired the assets from Shell in 2015.
Output from the fields peaked at 21,000 barrels per day in 1999 before declining in 2003.
The Chief Executive Officer of the Dangote refinery, David Bird, said the upstream assets could potentially provide a reliable crude source for Dangote’s refinery, which reached its full 650,000-barrel-per-day nameplate capacity recently.
He noted that the company is also seeking to establish its own shipping presence to reduce logistics costs and improve crude supply reliability. According to him, combining indigenous production with Dangote-owned vessels could provide a “fully integrated” and stable supply chain for the refinery.
Meanwhile, he said the refinery would take delivery of the crude “if it makes sense”, noting that joint venture partners would seek maximum value for produced barrels. “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.
Bird declined to comment on whether the company is participating in Nigeria’s ongoing bid round involving more than 50 oil blocks.
Forecasts by S&P Global Energy CERA indicate that production from OML 71 and 72 could plateau at 43,000 barrels of oil equivalent per day by 2036, representing a fraction of the refinery’s crude requirements. The plant ran at an average utilisation rate of 94 per cent in March, according to the downstream regulator. By 2028, the company plans to more than double the refinery’s capacity.
Data from S&P Global Commodities at Sea showed that Dangote supplemented Nigerian crude with United States and Angolan grades. In April, the refinery is expected to process four new crude types, with Bird noting that the company aims to widen its basket from the 40 grades processed so far.
In the coming months, the Nigerian National Petroleum Company Limited is expected to provide half of the refinery’s feedstock through a mix of naira and dollar-denominated sales, Edwin said.
“They had a lot of long-term commitments, so they were not able to easily release, but things have really improved,” he said.
Nigeria’s crude production remains below the 2 million barrels per day target for 2026, affected by underinvestment, crude theft and limited exploration. National output stood at 1.38 million barrels per day in March, according to the Nigerian Upstream Petroleum Regulatory Commission.
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