Aliko Dangote has postponed plans to begin crude oil exploration from the fourth quarter of 2024 to 2025. This modification comes after a two-month crude supply disagreement with Nigerian officials.
According to S&P Global Commodity Insights, Dangote’s goal of starting oil production by 2025 will be realized at his two oil holdings in Delta State, southern Nigeria. The first output is expected to be around 20,000 barrels per day, with an increase projected for the first quarter of 2025.
A top executive at the Dangote refinery verified the new start date in response to the S&P Global Commodity Insights report. “Yes, I saw the S&P report; our company is indeed planning to start crude oil production to support the refinery, but it will begin in the first quarter of 2025,” the employee said.
The start of Dangote’s crude output has been widely anticipated, as the Dangote refinery has faced numerous delays in providing refined petrol. These delays were caused by persistent conflicts over crude sales conditions.
The Nigerian National Petroleum Company Limited (NNPCL) has been accused of denying Dangote access to locally produced petroleum by either selling it at exorbitant prices in US dollars or stating that the crude was unavailable.
Faced with these challenges, the Dangote refinery had to buy oil at exorbitant costs from international markets such as Brazil and the United States.
Dangote initiated oil production at his Niger Delta upstream projects in Oil Mining Leases 71 and 72 to provide consistent crude supply for refinery operations.
Furthermore, Dangote is looking for a floating production, storage, and offloading vessel capable of handling 650,000 barrels to improve his logistical and production capacities. This action is intended to improve the efficiency and reliability of his oil refinery project.
