Dangote Plans to Expand Nigerian Refinery to World’s Largest

Aliko Dangote plans to sell 5–10% of his Lagos oil refinery and increase output to 1.4 million barrels per day, potentially making it the world’s largest. The refinery, operational since 2024, meets domestic fuel needs and exports products. Dangote aims to bring in outside investors and pursue strategic partnerships, despite past challenges with crude supply, industry disputes, and labor issues.

Africa’s richest man, Nigerian billionaire Aliko Dangote, has announced plans to sell a portion of his massive oil refinery, marking a significant shift in his business strategy. In a recent interview with S&P Global, Dangote disclosed that the multi-billion-dollar refinery intends to sell between 5% and 10% of its stake on the Nigerian Exchange (NGX) within the next year. The plan also includes increasing the refinery’s output to 1.4 million barrels per day, a move that could position it as the world’s largest oil refinery in terms of capacity. Dangote noted that the state-run Nigerian National Petroleum Company (NNPC) Limited could increase its stake in the refinery, which currently stands at 7.2%. Located in Lagos, the Dangote refinery began commercial production in 2024 after a decade of construction costing $20 billion, with an initial capacity to process 650,000 barrels of crude oil per day.

The refinery was built to meet Nigeria’s domestic fuel needs while also exporting products such as petrol, diesel, and jet fuel. The recent plan to sell stakes to other investors indicates a strategic shift in both the refinery’s ownership structure and operational approach.

Dangote explained that the stake sale would follow the model previously used for his cement and sugar businesses, allowing external investors to participate in his ventures. He emphasized that his company does not intend to retain more than 65% to 70% of shares. In the S&P Global interview, Dangote also mentioned potential strategic partnerships with Middle Eastern companies as part of a broader plan to expand operations and initiate a new petrochemicals project in China. Since commencing operations, the Dangote refinery has significantly influenced the Nigerian oil market, exporting fuel to both America and Asia.

Despite its success, the refinery has encountered several challenges, including crude oil shortages and disputes with major players in Nigeria’s oil sector. Additionally, it faced tensions with trade unions after hundreds of employees were dismissed over alleged "sabotage." The company later resolved the issue by reabsorbing the affected staff and redeploying them to other sections within the Dangote Group.