Dangote Group is actively pursuing a floating production, storage, and offloading (FPSO) vessel with a capacity of 650,000 barrels to support its upcoming oil production initiatives.
The company anticipates commencing operations at its two Nigerian oil assets, Oil Mining Leases (OMLs) 71 and 72, in the fourth quarter of 2024. This timeline follows challenges related to securing crude oil supplies from International Oil Companies (IOCs).
According to S&P Global Commodity Insights, the FPSO is essential for enhancing Dangote's refinery operations by facilitating crude oil production and storage.
Dangote holds an 85% stake in the West African E&P Venture, which has a 45% working interest in these blocks, while the Nigerian National Petroleum Company (NNPC) retains a 55% interest. Additionally, Nigerian upstream player First E&P operates OMLs 71 and 72.
The licenses for these oil blocks are situated in shallow waters in the southeastern Niger Delta, approximately 22 kilometers from the Bonny terminal.
The area includes the Kalaekule and Koronama oilfields, which have been explored since discoveries were made in 1966. Shell initiated production there in the late 1980s, with output peaking at 21,000 barrels per day in 1999 before experiencing a decline.
S&P Global estimates that these fields contain nearly 300 million barrels of recoverable oil and approximately 2.3 trillion cubic feet of natural gas.
Production could potentially commence by 2026, with projections suggesting an output of 43,000 barrels of oil equivalent per day by 2036. The imminent start of production at OMLs 71 and 72 is expected to provide crucial support for the Dangote refinery as it continues to address previous supply challenges.
