Dangote Plans Pan-African IPO for Oil Refinery Expansion
Aliko Dangote is set to sell shares of his oil refinery on multiple African stock exchanges, according to Frank Mwiti, CEO of the Nairobi Stock Exchange. This ambitious move aims to establish a pan-African initial public offering (IPO) for the Dangote Oil Refinery and Petrochemical Company.
In an email statement, FirstCap CEO Ukandu Ukandu confirmed that Dangote has engaged Stanbic IBTC Capital, Vetiva Advisory Services, and FirstCap as advisory firms for the IPO. Mwiti shared this plan following a recent meeting between the Nairobi Exchange and Dangote in Lagos, emphasizing the goal of creating a landmark stock sale that spans multiple African exchanges.
This initiative marks a significant development for African capital markets, poised to enhance the stock markets of Nigeria and other nations involved. It comes at a crucial time as Nigeria prepares to re-enter the FTSE Russell Frontier Markets Benchmark, potentially leading to greater investment opportunities.
Dangote’s refinery, which currently has a capacity of 650,000 barrels per day, is projected to expand to 1.4 million barrels per day within the next three years. This ambitious expansion positions it as a formidable competitor to Mukesh Ambani’s facility in India. Recently, the African Export-Import Bank disclosed that it has underwritten $2.5 billion of a $4 billion syndicated loan to support this expansion.
The refinery expansion is part of Dangote’s larger $40 billion investment plan over the next five years, which aims to boost growth through a significant increase in fertilizer production and refinery capacity. Furthermore, the plant supplies refined fuel to various African countries facing shortages exacerbated by geopolitical tensions.
Earlier this month, Dangote held discussions with officials from the Nigeria Exchange Group and the African Association of Securities Exchanges regarding making IPOs accessible to a wider range of investors across the continent.
NUPRC Implements Standardized Emission Reporting for Upstream Operators
In a parallel move, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has mandated that upstream oil and gas operators adopt standardized reporting templates and a measurement-based system for methane and greenhouse gas (GHG) emissions. This directive aims to enhance transparency and align with Nigeria’s climate commitments.
The policy directive, issued by NUPRC Chief Executive Oritumeiwa Isan, stipulates that operators need to institutionalize reliable measurement, reporting, and verification (MRV) practices for emissions inventories. This aligns with the 2022 Guidelines for the Management of Methane and GHGs in the upstream sector, responding to increasing global calls for action against climate change.
Starting in 2022, operators will be required to quantify their emissions using the Intergovernmental Panel on Climate Change’s (IPCC) Tier 1 methodology, transitioning to more advanced methods. By the third quarter of 2026, companies must adopt Tier 2 methodologies, moving to Tier 3 systems by January 2027.
While the IPCC framework serves as the baseline for reporting under the United Nations Framework Convention on Climate Change, the Commission encourages alignment with other recognized standards such as OGMP 2.0, API, and ISO, provided that submissions meet established criteria.
The NUPRC explained that the initiative addresses existing technological and infrastructural gaps in MRV across the industry. Workshops and guidance sessions are being organized to support operators in building the necessary capacity for this transition.
To ensure consistency, operators must now comply with a prescribed template that encompasses a Greenhouse Gas Emissions Management Plan (GHGEMP) along with a detailed methane and GHG emissions inventory. The Commission emphasizes the importance of evidence-based, transparent submissions that adhere to MRV principles.
These reforms aim to enhance accountability and improve Nigeria’s standing in global energy and carbon markets, ultimately attracting climate-smart investments to its upstream sector. The Commission reiterates its commitment to providing ongoing support through capacity building, technical guidance, and the deployment of MRV infrastructure.
