Dangote Refinery sale on NGX may cost N75,000 per share

• Becomes No.1 in the world with 1.4mbpd capacity

Africa’s richest man and President of Dangote Industries Limited, Alhaji Aliko Dangote, is pushing hard to become the biggest player in the crude oil refining business in the world with the upgrade of his 650,000 refinery project in the Ibeju-Lekki area of Lagos to 1.4 million barrels per day capacity.

To achieve this goal, the Kano-born billionaire has set in motion processes, which include raising funds for the expansion from 650,000 bpd to  1.4 million barrels per day.

It would be recalled that construction works on the first phase of the expansion programme, which involved the upgrading of the refinery’s production capacity to 700,000 bpd, kicked off in the earlier part of 2025.

The initial upgrade, which is expected to be completed by the end of the year, will mark a major milestone in Nigeria’s crude refining capacity as it will add another 50,000bpd to the current 650,000bpd capacity of the refinery.

Speaking to Argus, a leading provider of market intelligence to the global energy and commodity markets in July 2025, Group Executive Director, Dangote Industries Limited (DIL), Edwin Devakumar, said the upgrade became necessary following improvements in crude processing efficiency and output since the plant commenced operations earlier this year.

“The refinery is expanding from 650,000 barrels per day to 700,000 barrels per day, and this should be completed by the end of 2025.

“In most of the departments, our production level has gone far beyond 100 per cent. We have already crossed 120 per cent of the nameplate capacity of the mild hydrocracker, 125 per cent of capacity at the RFCC gasoline desulphurization unit, 106 per cent of capacity at the continuous catalytic regeneration unit, 140 per cent of capacity in the Penex process, and 143 per cent of capacity at the naphtha hydrotreater.

“So, we need to just do a bit of de-bottlenecking to increase the overall production,” Devakumar said.

With the completion of the first phase in December, works on the second phase is expected to start immediately.

Funding Challenge 

However, the second phase of the expansion program, which will double the Dangote Refinery’s nameplate capacity to 1.4 million bpd, will require huge funds.

Sources in Dangote Group privy to the plan, while speaking to our correspondent at the weekend, said that Aliko Dangote plans to fund the project using other finance options, rather than bank loans.

“He has already taken huge loans from both local and international financiers, which he is still repaying. So, the consensus among his financial advisers is that he should explore other funding options to raise the much needed funds for the expansion.

“One of the options suggested is going to the capital market to raise funds. It will be a much cheaper option.

“Apart from that, he will be sharing the risks with  investors, who take up stakes in the refinery,” said one of the sources, who inadvertently confirmed reasons for company’s management decision to sell a minority stake in the refinery”;

Alhaji Dangote had last week disclosed plans to sell a minority stake of 10 percent in his multi-billion-dollar refinery as part of a strategic move to double its capacity

In an interview he granted S&P Global, Dangote said the move will mirror the approach adopted for two of his companies, Dangote Cement and Dangote Sugar Refinery.

According to the billionaire, he plans to sell five per cent to ten per cent of his stake in the refinery on the Nigerian Exchange (NGX) Limited within the next year.

“We don’t want to keep more than 65 per cent to 70 per cent. Our business concept is going to change. Now, instead of being 100 percent Dangote-owned, we’ll have other partners.”

Dangote added that the shares would be gradually offered for sale depending on investors appetite and market depth.

Apart from the proceeds realized from the sales of shares in the refinery, Dangote is exploring strategic partnerships with Middle Eastern firms to help finance its expansion.

Size Game

When the upgrade is completed,  Dangote Refinery will dethrone India’s Jamnagar refinery to become the world’s largest crude oil refinery. The Jamnagar refinery in India is the world largest refinery with a nameplate capacity of 1.36 million barrels per day.

Investment bankers, who spoke to BH on the upcoming listing of the refinery on the NGX and the subsequent divestment of up to 10% equity for funds through a private placement, said majority of Nigerians would be disappointed as they will not be able to participate in the exercise.

Our of Reach

“Using the 11 best oil refinery stocks in the world as benchmark, a share of Dangote  refinery will likely go for between $45 to $50. This translates to between N66,170 and N73,500 per share.

“What this implies is that we are not going to see an Initial Public Offering (IPO), but a private placement where a small number of chosen investors, made up of friends, family, accredited investors and institutional investors will snap up the 10% shares put up for sale.

“With a minimum of 500,000,000  ordinary shares expected to be put on sale at a unit price of $45, Dangote is expected to rake in $22,500,000,000 ($22.5 billion), about N32.9 trillion at the exchange rate of N1,460/$”, the source stated.

Proceeds from the private placement, our correspondent learnt, will be more than enough to fund the upgrade as the extension will be co-located with the existing plant.

“We have to build the refinery again, either here or somewhere else. But really, somewhere else is not possible because we’d have to go and spend so much building infrastructure, and we have the infrastructure already here,” Dangote stated in a recent interview with Argus.

Meanwhile, Alhaji Aliko Dangote’s net worth has hit the $30 billion mark. According to Bloomberg’s Billionaires Index, Dangote’s net worth increased by $2.25 billion to $30.3 billion as at October 24.

The businessman moved up to the 75th position, making him the only African in the top 100 billionaires’ list.