…Subscription reaches roughly three times target as more than two million investors participate in share offer
NIGERIA: The planned public listing of the Dangote Petroleum Refinery has attracted orders worth approximately ₦6.4 trillion, equivalent to about $4.78 billion, as investor demand for the offering significantly exceeds its initial target.
The level of demand represents roughly three times the amount the refinery initially sought to raise through its initial public offering, according to sources cited by Reuters.
More than two million investors have reportedly subscribed through digital channels, while applications from other African countries could increase the final figure.
Aliko Dangote, the refinery’s owner, said investors from all 54 African countries and 120 countries worldwide had participated in the offer.
Shares have been made available at relatively accessible entry levels, with investments starting from about $4, according to the report.
The strong demand could prompt the company to exercise a greenshoe option, which would allow it to increase the size of the offering to as much as $2.1 billion.
Share allocations are expected next week, ahead of a planned listing on the Nigerian Exchange later in November.
Refinery expands its market position
The public offer represents a significant step in the financing and ownership structure of a refinery that has become central to Nigeria’s efforts to expand domestic petroleum processing.
Built at an estimated cost of $20 billion, the facility has a processing capacity of approximately 700,000 barrels of crude oil per day.
It began commercial operations in early 2024 and has since expanded production and exports.
The refinery has also benefited from stronger refining margins amid higher crude prices, according to the Reuters report.
The proposed listing would give investors an opportunity to acquire an interest in the business, while potentially broadening public participation in one of Nigeria’s most significant industrial projects.
However, strong subscription demand does not, by itself, establish the refinery’s future profitability or guarantee returns to investors.
Those outcomes will depend on factors including crude procurement costs, refining margins, operating performance, financing obligations and conditions in domestic and international petroleum markets.
Crude supply remains a key issue
The refinery’s expansion comes against the backdrop of continuing debate over access to Nigerian crude.
The facility has purchased substantial volumes of domestic crude as well as supplies from international markets.
In September, Reuters reported that the refinery had secured at least 16 million barrels of crude for October delivery, equivalent to approximately 520,000 barrels per day.
The volume included Nigerian crude supplied through arrangements involving the Nigerian National Petroleum Company Limited and purchases made through tenders.
Access to sufficient feedstock is particularly important as the refinery seeks to sustain high operating rates and expand its presence in domestic and export markets.
The Nigerian Upstream Petroleum Regulatory Commission has also disclosed plans to consider a domestic crude swap arrangement designed to reduce transportation costs for local refiners.
The proposed framework could help improve the economics of crude deliveries, although its impact will depend on implementation and commercial arrangements between producers and refiners.
What the listing could mean
The IPO could broaden ownership of the refinery and provide a new investment opportunity in Nigeria’s energy sector.
For the Nigerian Exchange, the planned listing would add a major industrial company to the market and could attract further attention to the country’s energy and infrastructure businesses.
The size of the reported subscription also indicates considerable investor interest in the refinery’s prospects.
Nevertheless, the ultimate significance of the offer will depend not only on the volume of applications received but also on the final amount raised, the allocation of shares, the company’s financial performance and its ability to sustain operations in a volatile energy market.
The planned November listing is therefore likely to be closely watched by investors, regulators and other participants in Nigeria’s petroleum industry.
