Cash flow from $12bn Refinery Project’ll go towards Crude Oil Production–Dangote
As the commencement date for operations at the Dangote Refinery and Petrochemical Limited draws closer, the company has disclosed that cash flow from the $12 billion refinery project will go towards crude oil production.
In specific terms, the funds will be channeled towards crude production in two Oil Mining Leases (i.e., OML 71 and OML 72), from which the company hopes to pump as much as 20,000 barrels of crude per day.
According to Edwin Devakumar, an Executive Director at one of Dangote Refinery’s upstream subsidiaries — Dangote Exploration Assets, the plan was made following the company’s believe that crude oil production will be where the majority of its cash flow from the refinery will go to.
With a refining capacity of 650,000 barrels per day, the Dangote Refinery project which was undertaken by Africa’s richest man, has been adjudged one of the biggest in the world. And in a bid to ensure its optimal functionality, analysts say it needs easy and constant access to crude oil.
It could be recalled that In 2015, West African E&P, a subsidiary of Dangote Refinery, expended $300 million to buy out 45% of OMLs from Total, ENI, and Shell. Since the purchase, efforts have been made by West African E&P and its partners to ascertain that the old oilfields are still viable.
One of the partners for the dangote refinery project, National Petroleum Investment Management Services, NAPPIMS recently confirmed that “We have established that some wells can flow and we have done minor refurbishment of the platform.”
When it eventually begins operation, the Dangote Refinery is expected to be a game-changer for Nigeria as it will generate as much as $11 billion per annum for the Nigerian oil and gas industry, put an end to Nigeria’s dependence on fuel importation, save the country from dirty fuels and create as much as 145,000 indirect jobs on completion.