Why Dangote Refinery Plans to List on London Stock Exchange

Dangote Refinery is planning to list on both the London and Nigerian stock exchanges, a top executive at the company, Devakumar Edwin, told Reuters on Tuesday.

According to Edwin, the decision became necessary after a practical assessment of market capacities of the Nigerian stock exchange.

“The NSE (Nigerian Stock Exchange) will not have adequate depth to handle exclusively the petroleum refinery. We would have to take it to LSE (London Stock Exchange) but also list in NSE,” he said.

The Dangote refinery’s move is not just about raising money; it’s also about bringing international attention and confidence to the company.

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Massive Capacity

The Dangote Refinery, located on the outskirt of Lagos, Nigeria’s commercial center, is set to transform Africa’s industrial landscape.

Built with $20 billion, it can process up to 650,000 barrels of oil every day, making it the biggest refinery in both Africa and Europe. This massive operation shows a major shift in the region’s energy abilities.

Aliko Dangote, the chairman of the Dangote Group and Africa’s richest man, has been instrumental in steering his conglomerate towards this monumental venture.

Dangote’s vision encapsulates a holistic approach to industrialisation. All his other companies such as Dangote Cement, Dangote Flour Mills, and Dangote Sugar are listed on the Nigerian Stock Exchange.

Strategic Partnerships

The refinery recently partnered with TotalEnergies, securing a deal that would ensure a steady supply of crude oil to the facility.

Recall that the Dangote Refinery was recently imported crude from the United States due to the Nigeria’s inability to meet its supply demand despite being frica’s top oil producer.

This partnership, along with the refinery’s capacity, is expected to drastically reduce Nigeria and West Africa’s reliance on imported energy, aligning with national interests to boost economic independence.

PMS refining timeline

The Dangote Refinery plans to start refining Premium Motor Spirit (PMS) in June 2024.

Although analysts at S&P Commodity Insights believe the June timeline is not feasible, suggesting the fourth quarter of the year as a more realistic timeline.

The full production from the refinery is expected to reduce the need for imported fuel, which costs Africa $17 billion. This change could also affect some European refineries that currently supply fuel to Africa.