The Dangote Group says it has recorded its first oil from upstream licences in the Niger Delta and is on track to begin producing marketable crude in the coming weeks.

Devakumar Edwin, vice-president at the group, disclosed that the company has opened a test well and commenced standard well testing as part of early production activities. He said the testing phase is expected to be completed within three to four weeks, after which output can be increased and additional wells drilled.

The development signals the group’s entry into crude oil production, a move aimed at strengthening feedstock security for the Dangote Refinery.

David Bird, chief executive officer of the refinery, said the upstream assets could provide a more reliable source of crude supply for the facility. He added that the company is also considering building its own shipping capacity to reduce logistics costs and improve delivery reliability.

According to Bird, combining indigenous crude production with Dangote-owned vessels could create a more integrated supply chain for the refinery and reduce exposure to supply disruptions.

He noted that crude from the assets would be supplied to the refinery where commercially viable, while transactions between the upstream and refining arms would be conducted on an arm’s-length basis.

The Nigerian Upstream Petroleum Regulatory Commission did not respond to enquiries on the development as of press time.

The move comes as crude supply gaps have occasionally affected refinery operations since it began processing products. Earlier this month, the Nigerian National Petroleum Company Limited increased crude cargo allocations to the refinery for May from five to seven.