Nigeria’s Dangote Refinery is on the verge of beginning crude oil production, according to a new report by S&P Global.
The refinery’s upstream oil blocks—Oil Mining Leases (OML) 71 and 72—are expected to start pumping crude before the end of the year, marking a critical milestone in the billionaire’s energy ambitions.
S&P said production from the Niger Delta fields is projected to reach 40,000 barrels per day, potentially easing the refinery’s dependence on foreign crude.
“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,” the report stated.
Steady Supply Amid Earlier Shortages
The report noted that sourcing crude has been one of the refinery’s toughest challenges since operations began. However, a new supply arrangement with the Nigerian National Petroleum Company Limited (NNPCL) has helped stabilise operations.
Under a “crude-for-naira” swap deal, NNPCL provides Dangote with 14 cargoes of crude—or their dollar equivalent—in exchange for gasoline and gasoil to be supplied in naira.
The two-year agreement, signed in August, guarantees a steady crude supply to the 650,000-barrel-per-day facility in Lekki, Lagos.
The deal, introduced last year under President Bola Tinubu’s directive, was designed to ensure that local refineries received priority access to Nigeria’s crude output.
A Step Toward Full Independence
Industry observers believe the new upstream output will significantly boost local refining capacity and reduce Nigeria’s reliance on imported fuel.
It will also help resolve persistent disputes between Dangote Industries and oil producers over pricing and supply terms that had previously forced the refinery to source crude from the United States.
Dangote has repeatedly thanked President Tinubu for his intervention, noting that it has “helped lower crude prices and stabilise feedstock supply.” But he warned that long-term sustainability depends on reliable domestic production.
With its own oil fields now set to come onstream, the refinery’s self-sufficiency appears within reach—a development that could reshape Nigeria’s downstream oil market and strengthen the naira.
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