Nigeria’s energy landscape may soon witness a significant boost as the Dangote refinery edges closer to producing its own crude oil. According to a new report by S&P Global, oil production from Dangote’s upstream assets—Oil Mining Leases (OMLs) 71 and 72—is expected to commence before the end of the year, potentially adding 40,000 barrels per day (bpd) to the nation’s output.
S&P Global’s report notes that production could begin as early as this month, providing an important supply injection for the 650,000-bpd refinery located in Lekki, Lagos. The refinery, touted as Africa’s largest, has struggled with irregular crude supply since its commissioning, leading it to source feedstock from international markets, particularly the United States.
The refinery’s reliance on foreign crude has drawn attention to Nigeria’s longstanding supply bottlenecks, but recent developments suggest the situation may be improving. Under a “crude-for-naira” swap agreement with the Nigerian National Petroleum Company Limited (NNPC), Dangote receives 14 crude oil cargoes—or their equivalent dollar value—in exchange for the same volume of refined products supplied in naira. This arrangement, introduced by President Bola Tinubu last year, was designed to ensure that refineries operating in Nigeria have consistent access to locally produced crude.
In addition to the swap deal, a two-year crude supply agreement signed between NNPC and Dangote Refinery in August aims to further stabilize feedstock availability. Industry analysts believe this will help the refinery operate closer to its full capacity, reduce dependence on imports, and enhance the country’s energy security.
Despite earlier challenges and disputes with local producers over pricing and supply, the move toward upstream self-sufficiency marks a turning point for the Dangote Group. Alhaji Aliko Dangote, the Group President, has reportedly expressed continued interest in acquiring new upstream assets, further expanding the conglomerate’s footprint in Nigeria’s oil sector.
Analysts suggest that once Dangote’s own crude production begins in earnest, the refinery’s operations could become more sustainable, potentially transforming Nigeria from a net importer to a major regional exporter of refined petroleum products.