Dangote Industries Limited, is set to
start oil production from two Oil Mining Lease (OML) 71 and 72 assets purchased
from Royal Dutch Shell in July last year as part of bids by the group to expand
The conglomerate also plans to ramp up crude production from the two oil well to around 100,000 barrels per day within a year or two of starting exploration.
The group already operating in the Cement, agriculture, foods, construction and real estate business will complete work of it 650,000 barrel per day capacity petroleum refinery plant in Lagos.
According to Devakumar Edwin, the group executive director at Dangote Industries Ltd, the company is currently working with Chinese and Malaysian contractors and has completed a development plan for the Kalaekule field on its OML 72 asset.
Edwin told Bloomberg in an interview that work will then move to an undeveloped KI discovery on Block 71, a small shallow water asset in southeastern Niger River Delta.
“We are looking at the first phase of 20,000 barrels a day but our objective is to expand it to 100,000 barrels a day for the two blocks,” Edwin said.
“If everything goes well, we can do that in 12 to 15 months because we are already doing the 3D seismic studies.”
Production from the fields will eventually feed a massive 650,000 barrel a day capacity oil refinery currently under construction on a swampy strip of land in Lekki, Lagos. With the refinery, Dangote aims to help end Nigeria’s reliance on imported fuel. The plant will reach “mechanical completion” in December and full operations are expected to start by the middle of 2021, Edwin said.
The Dangote Group, which includes Dangote Cement Plc and four other publicly traded companies, accounts for about a fifth of the value of the Nigerian bourse. The tycoon’s firm is also currently expanding production of cement, rice and sugar across his other businesses, Edwin said.
The conglomerate is adding about 10 million tons capacity of cement with new plants in at least five countries including Cameroon, Cote d’Ivoire and Ghana while boosting output in two of its Nigerian plants. It is also setting up six new integrated rice mills across the country with a capacity to process a million tons of paddy and a 125,000 tons sugar refinery.
“We have several projects on-going now and most of them is through in-house funding,” Edwin said. “They are all at various stages of completion.”