Nigeria’s energy sector continues to strengthen as indigenous capacity expands across the oil and gas value chain. The latest signal of that progress has come from the Dangote Group, which has now recorded its first crude oil production, marking the company’s entry into upstream operations.
The development comes as Nigeria continues working toward its 2026 crude production target of 2 million barrels per day, with national output still below that level. According to the Nigerian Upstream Petroleum Regulatory Commission, the country produced 1.38 million barrels per day in March, as the industry continues addressing long-standing operational constraints including investment gaps, crude theft and limited exploration activity in recent years.
According to Devakumar Edwin, Vice President of Dangote Group’s oil and gas division, the company has begun producing crude from its upstream assets and is preparing to supply marketable crude in the coming weeks. Edwin disclosed this during an interview with Platts, part of S&P Global Energy, from the premises of the Dangote Petroleum Refinery.
Production is currently coming from the Kalaekule field in Oil Mining Lease (OML) 72, where output stands at about 4,500 barrels per day following the completion of a long-awaited start-up in December 2025.
Olajumoke Ajayi, Chief Executive Officer of Dangote’s upstream joint venture West African E&P (WAEP), said production could increase to 15,000 barrels per day within the next month as operations scale up. Edwin added that a well has already been opened for standard testing, expected to be completed within three to four weeks, after which production could increase further as new wells are drilled.
The assets are located in shallow waters southeast of the Niger Delta, about 22 kilometres from the Bonny terminal. Oil was first discovered there in 1966, and WAEP acquired the assets from Shell in 2015. The fields previously produced 21,000 barrels per day at their peak in 1999 before output declined by 2003.
Dangote holds an 85 per cent stake in WAEP, which has a 45 per cent working interest in OML 71 and OML 72. The remaining interest is held by the state-owned Nigerian National Petroleum Corporation, while First E&P, WAEP’s minority stakeholder, operates the assets.
The upstream development could also support the Dangote Petroleum Refinery, which recently reached its full 650,000 barrels-per-day nameplate capacity. According to refinery CEO David Bird, the fields could provide a reliable crude source, although supply decisions will remain commercially driven.
Bird said the company is also exploring the creation of its own shipping operations to reduce logistics costs and strengthen supply reliability, potentially creating a fully integrated crude supply chain for the refinery.
Even with domestic production emerging, the refinery continues to diversify its crude intake. Data from S&P Global Commodities at Sea shows the facility has supplemented Nigerian crude with grades from the United States and Angola, and is expected to process four new crude types in April, expanding a slate that already includes 40 grades.
Meanwhile, the Nigerian National Petroleum Company Limited (NNPC Ltd) is expected to provide about half of the refinery’s crude supply in the coming months through a mix of naira- and dollar-denominated sales, Edwin said.
Industry forecasts from S&P Global Energy CERA suggest production from OML 71 and 72 could plateau at about 43,000 barrels of oil equivalent per day by 2036 still only a portion of the refinery’s needs. The refinery itself operated at an average utilisation rate of 94 per cent in March, according to the downstream regulator, and Dangote plans to more than double its refining capacity by 2028.
Bird declined to comment on whether the company is participating in Nigeria’s ongoing bid round involving more than 50 oil blocks.
Together, the developments highlight the steady rise of Nigerian-led investment shaping the country’s evolving energy future.
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