In a significant boost for Nigeria’s energy sector and the Niger Delta region, the Dangote Refinery is poised to commence its own crude oil production before the end of 2025, marking a strategic shift toward self-sufficiency in feedstock supply. This development, centered on upstream assets in the Niger Delta, promises to alleviate longstanding supply challenges for the $19 billion facility and create thousands of jobs in the oil-rich region.
Key Details of the Initiative
The refinery, Africa’s largest with a current capacity of 650,000 barrels per day (bpd), will draw from Oil Mining Leases (OML) 71 and 72 in the shallow waters of the southeastern Niger Delta, approximately 22 kilometers from the Bonny terminal. These blocks, where Dangote Group holds an 85% stake through West African E&P Venture (with NNPC owning the rest), are operated by First E&P, a local upstream firm.
- Production Timeline and Scale: Initial output is expected to start this month at around 20,000 bpd, ramping up to 40,000 bpd by early 2025. This will supplement the refinery’s needs, reducing reliance on imports from the United States and Brazil, which surged earlier this year amid local supply disputes.
- Supply Chain Integration: Currently, the Nigerian National Petroleum Company Limited (NNPC) supplies 14 cargoes of crude under a “crude-for-naira” swap, exchanging for refined products like gasoline and diesel. Dangote’s upstream push addresses past bottlenecks, including payment term disagreements with international oil companies (IOCs), ensuring a more stable feedstock flow for the Lekki-based plant.
- Expansion Ambitions: Beyond production, Aliko Dangote announced plans to double the refinery’s capacity to 1.4 million bpd—the world’s largest—requiring over 65,000 workers. This could generate $55 billion in annual revenue and position Nigeria as a net exporter of refined products.
Impact on the Niger Delta and Nigeria
Located in the Niger Delta gateway of Lekki Free Trade Zone, this move revitalizes the region’s economy, historically plagued by oil theft, militancy, and environmental degradation. The OML 71 and 72 projects are expected to create direct employment in exploration, drilling, and logistics, while curbing illegal bunkering by channeling more local crude into legitimate refining. Nationally, it aligns with President Bola Tinubu’s reforms, potentially stabilizing fuel prices, ending import dependency, and boosting forex reserves—Nigeria, Africa’s top oil producer, still imports 90% of its refined fuels.
Dangote, Africa’s richest man, emphasized the milestone: “This expansion will make it the largest refinery in the world ever,” highlighting job creation and energy security. Social media buzz underscores optimism, with users hailing it as a “game-changer” for #NigeriaRising.
Challenges and Outlook
While promising, hurdles remain: Securing a 650,000-barrel floating production, storage, and offloading (FPSO) vessel is underway to support operations. Past delays, including regulatory spats with NNPC and IOCs, underscore the need for seamless collaboration. Analysts predict full integration could cut fuel imports by 100% and export surplus to West Africa, fostering regional integration.
As Nigeria navigates global oil volatility, Dangote’s vertical integration exemplifies private-sector innovation driving national progress. For the Niger Delta, it’s a beacon of sustainable development amid resource curse debates.
