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By Dimeji Bassir

OPINION/ANALYSIS

By the time the Dangote Petroleum Refinery begins selling shares to the public later this year, millions of Nigerians will have heard the headlines. Africa’s largest refinery. With input capacity of 650,000 barrels per stream day. A $20Billion construction price tag. A planned valuation between $40 and $50Billion. The biggest IPO in African capital market history.

Less of the public conversation has touched on how it got built, what it still owes, and what the IPO is actually trying to solve. All three matter if you are thinking of buying in.

How the Money Was Put Together

A refinery this size is not built with one cheque. The roughly $20Billion was assembled from two pots: equity (ownership capital that does not have to be repaid) and debt (loans that do).

Only about $5.5Billion came from borrowed money. The rest — close to $14.5Billion — came from equity. That is unusual. Most large refineries globally are financed with 60 to 70% debt. Dangote went the other way: roughly 72% equity, 28% debt. Nigerian country risk plus a long construction timeline made it almost impossible to borrow the way other refiners do. So Aliko Dangote funded most of it himself, by reinvesting profits from his cement, sugar and fertiliser businesses and leveraging his stake in Dangote Cement.

Today, ownership purportedly sits with two parties. Dangote Industries Limited holds 92.75% percent. NNPC holds 7.25%, which it acquired in 2021 for $1Billion. The original deal was for NNPC to eventually own 20%in exchange for steady crude supply, but the state oil company never completed payment for the balance. Dangote has since rejected fresh attempts by NNPC to buy more, saying he wants the remaining shares reserved for ordinary Nigerians through the IPO.

The debt has been restructured several times. The current arrangement, signed in March 2026, is a fresh $4Billion syndicated loan involving 31 lenders. Afreximbank underwrote $2.5Billion. Access Bank, Standard Chartered, MUFG of Japan and Mashreqbank of the UAE played leading roles.

The strain showed in August 2024, when Fitch downgraded Dangote Industries’ national long-term rating from AA(nga) all the way down to B+(nga) and placed it on Rating Watch Negative. The reasons: weaker liquidity, lower-than-expected proceeds from asset disposals, the refinery operating at only 50% capacity in the first half of 2024, and a ₦2.7Trillion FX loss in 2023 from naira devaluation against the group’s dollar-denominated debt. Fitch also flagged the absence of audited 2023 accounts as a corporate governance issue, and noted that NNPC’s decision not to exercise its option for the remaining 12.75% stake had widened the refinancing gap. The refinery is now reported to be operating above its nameplate capacity.

The Hidden Help From the Government — Then and Now

The headline numbers leave out something important. The refinery has received, and continues to receive, significant non-cash support from the Nigerian state. Some of it was historical and tied to construction. Much of it is current and ongoing.

“An IPO of this size deserves more scrutiny than the average retail investor might give it-Pay attention to the working capital position, not just the EBITDA headline. Look at the debt repayment schedule alongside the dividend promise. Check what the prospectus says about the FX investigation and any contingent liabilities. Look carefully at how the prospectus treats regulatory risk — what assumptions does it make about the continuation of Naira-for-Crude, the restrictive interpretation of import licences, and the free trade zone tax status?”

The Construction-Era Foreign Exchange Advantage

For most of the construction period, Nigeria operated multiple exchange rates. Ordinary Nigerians and most businesses bought dollars at the parallel market rate. A smaller group of approved companies could buy dollars at the much cheaper official rate. The gap was often 20%. Sometimes nearly 80%.

Dangote Industries was one of the approved companies. By its own disclosure, between 2010 and 2018 it received CBN approvals to buy $3.76Billion in foreign exchange, of which it says it used about 48%. As most of the refinery’s equipment have had to be imported, paying at the official rate rather than the parallel rate saved the project significant money. Realistic estimates put this implicit benefit at somewhere between $1Billion and $3Billion over the construction period.

Whether all of this was strictly proper might be undetermined. After Godwin Emefiele was removed as CBN governor in 2023, the EFCC opened an investigation into preferential forex allocations under his tenure to Dangote Industries and 51 other companies. Dangote denies wrongdoing, saying its allocations followed proper procedure and were backed by Letters of Credit. The investigation has not been formally closed.

The Ongoing Protection — And This Is the Bigger Story

Most of the public conversation has focused on the historical FX advantage. The more consequential support is happening right now, and it is what currently underwrites the refinery’s commercial viability in a market that was supposed to be liberalised after the removal of fuel subsidies in 2023. Three of these ongoing protections stand out.

The Naira-for-Crude programme. Under a Federal Executive Council directive championed by Nigeria’s President, Bola Tinubu, NNPC sells domestic crude to the Dangote refinery in naira rather than dollars. This sidesteps the foreign exchange exposure that any other refinery in Nigeria would face when buying internationally-priced crude. The Naira-for-Crude framework was renewed in 2025 and remains in force in 2026. No other large industrial buyer in Nigeria enjoys a comparable carve-out from the dollar economy.

Restrictions on competing fuel imports. Of the three, this is where the protection could not be starker, and where the fight is loudest. The Petroleum Industry Act of 2021 envisaged a liberalised downstream market. Anyone with a licence could import fuel, and prices would settle competitively. In practice, the regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has interpreted the Act narrowly: import licences should only be granted when there is a “proven shortage” of local supply. As Dangote’s output has ramped up, the regulator has cut back on the issuance of new import licences. When NMDPRA recently approved six marketers (NIPCO, AA Rano, Matrix, Shafa, Pinnacle and Bono) to import 720,000 metric tonnes of petrol, Dangote sued the Federal Government to have those licences nullified, arguing that domestic supply is sufficient. A similar lawsuit was filed in 2025, withdrawn after Federal Government intervention, and now refiled in 2026.

In effect, Dangote is using the courts to enforce a near-monopoly position on petrol supply in Africa’s largest fuel market. Whether or not the lawsuit succeeds, the underlying regulatory posture — that the regulator can use its licensing discretion to limit competition in favour of one business — is itself a form of protection. The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has openly warned that the arrangement risks creating a private monopoly in what was meant to be a liberalised market.

Direct executive endorsement. At the 2026 Africa CEO Forum in Kigali, Mr. Tinubu was unusually candid about the support the government has provided. He said the Federal Government granted Dangote support measures including crude supply in naira and “trading licence waivers” to stabilise domestic fuel supply. “A risk-taker like the Dangote refinery must be encouraged by the government. What I did to support him was give him trading licences and support him in the effort to source the crude that is necessary,” he said. This is the sitting president, on the record, describing the refinery as a strategic national asset that warrants discretionary state intervention.

Why This Matters for the IPO

Sum it up. Naira-for-Crude, constrained competing imports, free trade zone tax holidays, import duty waivers, and direct executive backing. The conclusion is hard to escape. The refinery is generating cash, but it is being earned inside a protected commercial environment.

The risk that no marketing brochure will spell out plainly: a meaningful portion of the refinery’s margin today depends on policy choices that can be reversed by a future administration.

The downside scenarios are easy to lay out. If a new government, under pressure to lower pump prices or to satisfy IMF and World Bank market-liberalisation conditions, opens petrol imports fully, Dangote would face direct price competition from international and local traders who can land refined product cheaply when global margins compress. The refinery’s domestic petrol margin which is the engine of its cash flow would tighten sharply. If Naira-for-Crude is discontinued and Dangote has to buy all its feedstock in dollars, the working capital requirement becomes meaningfully larger and the FX exposure on USD debt service becomes harder to manage. If the free trade zone tax holiday expires unrenewed, the effective tax rate jumps from near-zero to the standard corporate rate.

These are not far-fetched possibilities. Nigerian policy has shifted dramatically with every change of administration for the last twenty years. The Tinubu government’s pro-Dangote policy rests on personal relationships, strategic alignment with the administration’s industrialisation posture, and the political optics of supporting a flagship indigenous project. A government with different priorities in the future could rationally choose to weaken some or all of these protections.

There are reasonable arguments for supporting an infant strategic industry. Many countries have done exactly this when building national champions. The question an investor must answer before subscribing to the IPO at a $40 to $50Billion valuation is whether that price assumes the protections will continue indefinitely — and what happens to the share price if they do not.

The Engineering Risk Most People Don’t Think About

The refinery is described as “the world’s largest single-train refinery.” That phrasing carries a particular kind of risk that the marketing copy tends to skip over.

A “train” in refining language means one continuous processing line. Crude comes in at one end; petrol, diesel, jet fuel and petrochemicals come out at the other. Most large refining complexes split capacity across multiple smaller trains, so if one section needs maintenance, the others keep running. Dangote built one giant train instead. The economics are better when everything is running. The exposure is worse when something is not.

If any critical unit along that 650,000BPSD chain has to shut down — for a planned turnaround, a catalyst change, a pump failure or a fire — a much larger portion of the refinery has to come down with it than at a multi-train facility. Industry standard turnarounds for refineries this complex run 30 to 60 days, every four to six years. For Dangote, that potentially means 30 to 60 days of dramatically reduced national fuel supply, and meaningful gaps in revenue during the shutdown. The first major scheduled turnaround, expected within two or three years, will be the real test.

Why The IPO Is More Than a Wealth Opportunity

The IPO is being marketed as a chance to own a piece of an industrial giant, with the added attraction of dividends paid in dollars. Those things are real. The part that gets less airtime is that the IPO is also a financial necessity.

Running a refinery this large eats enormous working capital. Crude is purchased using Letters of Credit (LCs) — bank guarantees that crude sellers will be paid when they present the shipping and quality documents proving the cargo was delivered as agreed. The crude seller, sitting in Houston or Riyadh, does not need to know whether Dangote’s bank account is full on the day payment is due. They only need to know that a credible bank stands behind the trade. The bank steps into Dangote’s shoes for the seller’s purposes, in exchange for which Dangote pays a fee and commits to reimburse the bank. Each LC ties up a slice of the refinery’s available bank credit lines from the moment it is issued until the supplier is paid and the cargo has been processed and sold. The numbers explain why this business is so cash-hungry regardless of where the bottom line eventually lands.

A refinery processing 650,000 barrels a day needs roughly 19.5Million barrels of crude every month. Crude is delivered by tanker, and the typical vessel used for Nigerian Bonny Light is a Suezmax, which carries about one million barrels. Dangote’s CEO David Bird has put it plainly: the refinery needs between 13 and 19 cargoes a month to run at full capacity.

The price of each cargo depends on the prevailing oil price. With Brent crude trading around $70 to $80 per barrel through much of 2025, a single one-million-barrel cargo cost roughly $70Million to $80Million. When Brent spiked above $100 in early 2026 due to Middle East tensions, the same cargo cost over $100Million.

Multiply that by 13 to 19 cargoes a month and the working capital reality emerges: the refinery needs to fund roughly $1.0Billion to $1.5Billion of crude purchases every single month at recent oil prices. The Central Bank of Nigeria’s own balance of payments data confirmed that Dangote imported $3.74Billion worth of crude in 2025 alone — and that figure only counts the imported portion.

To keep these LCs flowing, the refinery needs reliable access to several billion dollars in trade finance lines at any given moment. Banks issue these LCs based on the refinery’s creditworthiness and the predictability of its cash flows — both affected by how much debt the company is carrying. When oil prices rise, LC requirements rise with them. When refining margins tighten, banks become more cautious about extending lines. When the syndicated loan needs servicing, cash that could have gone to feedstock gets diverted to debt repayment.

The IPO is designed to break this cycle. A successful $5Billion raise would pay down a meaningful portion of the remaining $3.65Billion in debt, free up working capital currently locked into servicing loans, strengthen the balance sheet to negotiate cheaper LC lines, and let Dangote Industries unwind some of its concentration risk.

In short, the IPO is a balance sheet exercise. Years of construction delays, debt restructurings, and reliance on favourable state policies have left the company carrying more financial weight than it can comfortably service from operations alone. The growth story is genuine and so is the relief the cash injection would provide.

What This Means for You

An IPO of this size deserves more scrutiny than the average retail investor might give it.

Pay attention to the working capital position, not just the EBITDA headline. Look at the debt repayment schedule alongside the dividend promise. Check what the prospectus says about the FX investigation and any contingent liabilities. Look carefully at how the prospectus treats regulatory risk — what assumptions does it make about the continuation of Naira-for-Crude, the restrictive interpretation of import licences, and the free trade zone tax status? The dollar dividend promise depends on continued SEC and Finance Ministry approval, which is not yet finalised. And the offer price matters: a $40 to $50Billion valuation on a business with around $20Billion of replacement cost means you are paying for the growth story upfront.

The Dangote Refinery is a genuine national achievement. It has reshaped Nigeria’s fuel economy in less than two years and put Africa on the global refining map. None of that changes what is underneath — a project built heavy on one man’s balance sheet, propped up by state policy choices that remain politically reversible, and exposed to the working capital pressures that come with any refinery of its size.

The IPO is the opportunity for ordinary Nigerians to buy in to the refinery. It also represents the moment when new shareholders inherit every unresolved question that has lingered on this project for the last decade.

Read the prospectus carefully when it is released, and ask the hard questions before signing the cheque.

Bassir, a commentator on Nigerian Oil and Gas sector affairs, is a member of Africa Oil+Gas Report’s International Advisory Board

By Sully Manope, in Abuja

Every month, the Nigerian Upstream Petroleum Regulatory Commission convenes a meeting of operating companies and the Dangote Refinery in a room at a princely hotel in Abuja.  The March 2026 edition of the meeting took place on Mach 16, 2026.

In that meeting the operators are obliged to offer cargoes of crude to Dangote Refinery as part of their Domestic Obligation.  And they all do. “All the producers offer  cargoes of Nigerian crude to Dangote”, several operators tell Africa Oil + Gas Report. “What the producers offer Dangote is much more than it purchases”, they say. What the NNPC offers Dangote is oftentimes double what it purchases, one source says. “The offer they get from Nigeria is more than the capacity the 650,000Barrel Per Stream Day refinery”. This article is based on interviews with personnel in five producing companies including NNPC, all of who requested anonymity to discuss sensitive industry matters. Indeed, as a rule, operators do not officially discuss operational details that come across as political.

As the Dangote Group has persistently reinstated in public that Nigerian operators are reluctant to sell it crude, Africa Oil + Gas Report decided to find out from operators themselves what truly is the situation. “They don’t necessarily want to buy at market prices”, some operators explain. “They want private operators to sell crude to them at the Fiscal price”, some operators disclose.  “ But nobody can sell to you at the fiscal price (fiscal price is the price at which the government computes your taxes and royalties).

“You can’t ask me to sell less than I sell to Vitol or Gunvor”, one operator says.  The Dangote group has often asked international companies operating in Nigeria to sell it crude directly, and has complained that the companies sell only though their trading arms.

Africa Oil + Gas Report learnt, from talking with operators who take part in the monthly Domestic Crude Obligation meeting  that the NNPC always offers Dangote Petroleum Refinery & Petrochemicals (DPRP) everything available (Not committed to debt obligations or USD Cash Calls) to buy in Naira.  “They select what they want and return the rest to the NNPC”, the sources say.

Dangote refinery’s CEO David Bird declared on March 25, 2026 that the plant receives “only five of the monthly 13 to 15 crude cargo needs under the crude-for-naira programme”. But Africa Oil + Gas Report  sources affirm: “We’d often offer up to 10 cargoes and they’d typically take about five (5)”.

When news broke that Dangote Refinery received 10 crude oil cargoes from the NNPC in March 2026, doubling its previous monthly average of five, we asked our sources what happened. Their response: “They decided to receive 10 cargoes this time”. The news report noted that shipment included six cargoes paid for in naira and four in dollars, but those who are close to the transaction said that NNPC finally agreed to receive payment in naira for seven cargoes and in dollars for fthree cargoes.

Some of the arguments by operators are not new. They have been part of the debate in the media. Dangote spokespersons have lamented that Nigerian operators offer Dangote at premium prices, with the comments coming across as if those prices are meant as disincentives. This narrative suggests that there is  a denial of Nigerian crude to Dangote which forces the refinery to imports that expose it to global price hikes.

But our multiple sources unanimously counter that the contrary is the case.  Nigerian crude is priced much higher than the imports that Dangote bring into the country. $3.74Billion worth of imported crude credited  to the Dangote Refinery in 2025   could have been worth $4.5bBllion, if all of those those crudes were sourced from Nigeria on a willing buyer, willing seller basis. As of late April 2026, Nigerian Bonny Light crude is trading at a significant premium to West Texas Intermediate (WTI), fueled by geopolitical tensions, with Bonny Light reaching approximately $113–$130 per barrel, while WTI hovers around $92–$96 per barrel

“In the PSCs, if you bring in a law that affects the commercial terms in which the contract is signed, NNPC has to make it a whole if you market at a lower price”, our sources explain.

“Anything about Nigeria crude oil supply to Dangote is within his control”.

Cameroon’s newly proposed 30,000Barrels Per Stream Day (BPSD) refinery and petroleum storage complex in Kribi port already has a clear line of sight to financing.

$210Million or 22 %  of the $950Million required for the plant’s construction will come for Banque Gabonaise et Française Internationale (BGFI). The remaining $740Million will be provided by Ariana Energy (49%), Tradex S.A. (31%), and the National Hydrocarbons Corporation (SNH) (20%).

SNH alone has opted to bear the $295Million cost of the storage terminal, proposed to have a capacity of 250Million to 300Million Litres for products including gasoil, gasoline, Jet A1, kerosene and heavy fuel oil (HFO), according to CSTAR, the newly formed storage subsidiary of  SNH, which is leading the entire project.

BGFI, headquartered in Gabon, is a top lender in Central Africa as well as the continent’s Francophone countries: Benin, Cameroon, Congo, Côte d’Ivoire, Gabon, Equatorial Guinea, Madagascar, DRC, Sao Tome and Principe, and Senegal, with a subsidiary in France.

Tradex is a trading subsidiary of SNH. Arian Energy is a UAE headquartered entity, which has interests in a variety of sectors.

The Kribi refinery project is running ahead against the backdrop of the on-going rehabilitation of the 42,000BPSD Limbe refinery, scheduled for a partial restart in December 2027. Limbe caught a devastating fire in May 2019 and has been idle since then.

CTAR says that the Kribi’s Front-End Engineering Design (FEED) studies are expected to be completed in June 2026 and equipment delivery is planned for September 2026.

The indicated start date of production, around December 25, 2026, is a bit of a stretch, even though CSTAR explains that “initial capacity will reach 10,000 barrels per day, before increasing to 30,000 barrels per day from 2027”.

By Macson Obojemuinmoin, in Warri

After a five month global search for well-heeled and technically honed companies who could invest in, as well as run the four state owned Nigerian refineries, the NNPC is in conversation with the China Refinery and Petrochemical Company, the “last wiling partner standing”.

The Nigerian state hydrocarbon company, which owns the four moribund plants with combined 450,000Barrels Per Stream Day (BPSD) input capacity (in Warri, Port Harcourt and Kaduna cities in the country), embarked on a new strategy to revamp them after the last Turn around Maintenance ran aground.

The on-going negotiation with China Refinery and Petrochemical Company (CRPC) is partly focused on choosing between collocating a refinery imported from China with the 120,000BPSD Warri Refinery (which the Chinese prefer) or entirely refurbishing the 210,000BPSD Port Harcourt Refinery at the cost of around $2.5Billion (which is the Nigerians’ choice). Either way, CRPC will fund and run the plant, with NNPC being a non-operating, non-funding partner. The shareholding structure will be determined after the technical terms have been fully agreed.

If a deal is signed with CRPC, it will be “the fruitful culmination of the world-wide recruitment of a word class facility engineering  companies with financial heft who could invest in, as well as run the refineries, with the NNPC taking non operatorship role”, multiple sources at NNPC told Africa Oil +Gas Report.

“What we wish for at this point is having non operated minority stakes in functioning refineries, whether it is a 20% stake in Dangote or 30% stake in another; we want to have a skin in the country’s refining game, but we don’t have to be the sole owner or operators”, NNPC sources tell Africa Oil +Gas Report.

Africa Oil+Gas Report reported exclusively in October 2025, that the office of the NNPC’s Executive Vice President (EVP) Downstream  had, between August and late September 2025, embarked on a worldwide search of such companies and had whittled down, to three, the number of  such companies ready to do business.

The decision to get into such a partnership, emerged from the review of NNPC’s asset audit and portfolio benchmarking, conducted over the course of three months between May and July 2025.

NNPC’s current, ten month old executive management (led by GCEO, Bayo Ojulari) and board of directors (chaired by Ahmadu Kida- Musa) deliberated on the likely outcome of the sale of the state owned facilities, in the context of the emergence of the Dangote Refinery, which has a nameplate capacity of 650,000 Barrels Per Stream Day (BPSD) and has reported current gasoline output of 70Million litres a day.

Ojulari alluded to the findings of the portfolio review at the Nigeria International Energy Summit in Abuja on February 4, 2026, when he said: “We were spending a lot of money on operations, a lot of money on contractors. But when you look at the net, we were just leaking away value”. He stopped short of criticising the Turn Around Maintenance, carried out on the Warri and Port Harcourt Refineries between 2021 and 2025, but he contended: “The crude we were taking into Port Harcourt was producing mid-grade products. When you aggregate their value compared to what you put in, it was a waste.”

NNPC insists on being in the refinery business because in its view(1), as a company mandated by law to ensure energy security, it must be part of internal competition with other local refiners and (2)  the country cannot afford only one large refiner and product supplier.

To have had to sell the refineries, “it would look poorly, in the public sphere, if NNPC should announce the sale of its refineries, less than a year after spending over $2Billion on Turn Around Maintenance”.

Under Kyari, NNPC has spent considerable energy on refurbishing the plants in the last six years. The facilities came on stream between 1965 and 1989, but have been largely non performing in the last 18years.  Between 2019 and mid-2023, Nigeria’s cabinet of ministers, known as the Federal Executive Council (FEC), approved  a total of approximately $3Bllion for the phased rehabilitation of the four plants in Port Harcourt, Warri, and Kaduna refining complexes, with an additional 100Billion Naira (approximately $240Million) reportedly spent on refinery rehabilitation in 2021 alone. But there have been significant commissioning hitches despite the fact that the refurbishment of these plants were being led by such bespoke contractors as Marie Technimont of Italy (Port Harcourt plants) and Daewoo Construction of Korea (Warri and Kaduna)

The Tema Oil Refinery (TOR) Ltd resumed crude oil refining operations on December 19, 2025, “after several years of inactivity”, the company’s management has declared.

“This achievement follows the successful completion of major Turnaround Maintenance (TAM) works on the Crude Distillation Unit (CDU), executed within three months from August 1 to October 30, 2025”, the statement explained.

“Following the completion of the TAM, the National Petroleum Authority (NPA) conducted comprehensive regulatory inspections and confined TOR’s full compliance with all mandatory safety and operational requirements.

“Consequently, the NPA granted clearance for the resumption of refining activities”, TOR Ltd added.

With the required regulatory clearance, refining operations began with all the line of petroleum products going to storage for the first time in several years.

“As part of a phased transition toward full operational capacity, and in advance of the refinery’s official recommissioning, TOR will continue operating over the coming months to stabilize systems, optimize performance, and ensure sustained operational reliability. In addition, TOR has completed the installation of a new furnace, F-61 , which will soon be commissioned and integrated into the CDU.

This critical upgrade will enable the refinery to restore its original nameplate capacity of 45,000 barrels per stream day (BPSD), up from the current operating level of 28,000BPSD, with a clear strategic pathway to expand the capacity to 60,000 BPSD in the medium term, following the installation of a new Air-Cooler.

“The Government of Ghana will formally commission and tie-in the F-61 furnace at a later date. Details regarding the commissioning event, including timing and arrangements, will be duly communicated to stakeholders and the general public in due course”.