The Dangote refinery is set to commence crude oil production soon, marking a major milestone in Nigeria’s quest for energy independence and industrial self-sufficiency.
According to a recent report by S&P Global, the conglomerate’s upstream oil operations are gearing up to produce up to 40,000 barrels of crude oil per day before the end of 2025.
The development represents a significant leap for the Dangote Group and the nation’s energy sector, which has long grappled with challenges surrounding feedstock supply, import dependency, and foreign exchange pressure.
Dangote begins crude oil production soon: A major step toward energy stability
The S&P Global report revealed that Dangote’s upstream assets, located in Oil Mining Leases (OML) 71 and 72 within the Niger Delta region, are expected to come onstream this quarter.
These assets, once fully operational, are projected to inject an additional 40,000 barrels per day into Nigeria’s crude oil output, easing supply concerns for the 650,000-barrel-per-day Dangote refinery in Lekki, Lagos.
“Dangote’s upstream assets in the Niger Delta, Oil Mining Lease 71 and 72, could soon provide another supply injection, with production expected to start this month and reach up to 40,000 barrels per day,” the report stated.
The refinery’s progress has been closely watched by global energy analysts, as it holds the potential to transform Nigeria from a net importer of petroleum products to a major exporter within Africa.
Crude-for-naira deal sustains refinery operations
The report also noted that the Nigerian National Petroleum Company Limited (NNPC Ltd) has been instrumental in sustaining operations at the refinery through a crude-for-naira swap arrangement, which allows Dangote to receive crude oil in exchange for refined products such as petrol and diesel supplied locally in naira.
Under the agreement, NNPC provides Dangote with 14 crude oil cargoes or their equivalent value in dollars while the refinery delivers refined products in local currency.
This innovative swap model was approved by President Bola Tinubu last year to address crude shortages facing the refinery and stabilize the domestic fuel market.
Industry analysts say the crude-for-naira system has been pivotal in reducing foreign exchange pressure, promoting local transactions, and ensuring the availability of petroleum products within the country.
Dangote begins crude oil production soon amid rising demand
Since its commissioning, the Dangote refinery has faced challenges securing steady crude supply due to disagreements with local oil producers and limited domestic availability.
However, the anticipated start of crude oil production from the company’s upstream assets is expected to ease these bottlenecks and enhance refining efficiency.
“Dangote’s ability to produce its own crude will improve feedstock reliability, lower operating costs, and strengthen Nigeria’s refining capacity,” said an industry expert who spoke on condition of anonymity.
The refinery’s new crude production also aligns with the government’s plan to deepen value addition across the energy value chain, reduce reliance on imports, and conserve foreign reserves.
NNPC, Dangote sign two-year crude supply deal
To further guarantee operational stability, the NNPC recently signed a two-year crude supply agreement with the Dangote refinery, ensuring consistent feedstock delivery to support the refinery’s production targets.
The deal, signed in August 2025, reinforces the public-private collaboration needed to strengthen Nigeria’s downstream industry.
Sources at the Ministry of Petroleum Resources confirmed that the agreement would help sustain production at optimal levels while enabling NNPC to participate in the refinery’s long-term success.
President Tinubu’s administration has repeatedly described the refinery as a cornerstone of its industrial and economic reform agenda.
The project is expected to generate thousands of direct and indirect jobs, reduce fuel import bills, and help stabilize domestic pump prices in the long term.
Dangote’s vision for energy self-sufficiency
The Group President, Alhaji Aliko Dangote, has remained steadfast in his commitment to Nigeria’s energy transformation.
He has expressed gratitude to the government and NNPC for their support in resolving crude supply challenges while reaffirming plans to expand the company’s upstream and midstream portfolios.
According to reports, Dangote continues to explore new upstream investment opportunities to diversify the conglomerate’s asset base and ensure consistent crude supply to the refinery.
He stated that the upcoming crude production from OML 71 and 72 represents a new chapter in the company’s drive toward vertical integration and long-term sustainability.
A catalyst for Nigeria’s economic growth
Analysts believe that Dangote beginning crude oil production soon will serve as a catalyst for Nigeria’s economic recovery, particularly amid efforts to reduce the nation’s fuel import dependence.
The refinery’s ability to secure its crude supply chain internally will not only stabilize production but also improve export potential and revenue generation.
The refinery’s operation also promises to strengthen Nigeria’s balance of trade and foreign reserves by minimizing import expenditure and promoting local value creation.
With the Dangote refinery set to commence crude oil production soon, Nigeria is on the verge of achieving one of its most ambitious energy milestones.
The development reinforces the country’s capacity to control its energy destiny, attract global investors, and expand industrial output.
For millions of Nigerians, the successful start of crude production marks more than just an industrial achievement — it symbolizes a step closer to sustainable energy security, job creation, and economic transformation.
