Dangote Petroleum Refinery and Petrochemicals FZE plans to double its workforce as it moves to increase its processing capacity from 700,000 barrels per day (bpd) to 1.4 million bpd by 2029.
Edwin Devakumar, Vice President, Oil and Gas and Fertiliser at Dangote Industries Limited, disclosed this while speaking with journalists at the Dangote Refinery in Lagos on Friday.
Key Highlights
- Dangote Refinery plans to double its workforce as part of its expansion programme.
- The refinery is targeting an increase in processing capacity from 700,000 bpd to 1.4 million bpd by 2029.
- The company is seeking to raise N2.2 trillion, equivalent to about $1.6 billion, through an equity offer to finance the expansion.
- The refinery’s fertiliser unit is expected to increase annual production from three million tonnes to 12 million tonnes.
- The expansion is expected to cost less than the initial $20 billion refinery project because much of the existing infrastructure can be replicated.
- Dangote Refinery is considering listings on stock exchanges in Johannesburg, Nairobi and potentially the United States.
- The company reported $1.8 billion in profit after tax for the six months ended June, according to its offer prospectus.
“Within the refinery, the workforce will practically become double, except in the water treatment section, because there we already have substantial capacity,” Devakumar said.
He said the increase in staffing would be driven mainly by the refinery’s expansion, while growth in the transport segment was expected to be limited unless domestic consumption increases significantly.
“Obviously, we don’t expect a substantial increase in the consumption of petrol and diesel within the country in the short term,” he added.
N2.2 Trillion Equity Offer to Fund Expansion
The expansion is part of Dangote Refinery’s plan to raise N2.2 trillion, or about $1.6 billion, in equity capital from investors to finance the increase in processing capacity from 700,000 bpd to 1.4 million bpd.
The company opened the order book for the equity offer to the public on Monday. Heavy demand in the initial minutes reportedly caused significant traffic on some trading platforms and digital investment channels.
Bamboo and Cowrywise, among the fintech and digital platforms approved by the Securities and Exchange Commission to facilitate transactions for the offer, reported service disruptions following the surge in demand. Bamboo reportedly recorded traffic significantly above its normal level.
The offer, described by Dangote as “the people’s IPO”, has a minimum subscription of 10 shares, valued at N5,250.
The company is targeting a broad range of investors, including retail investors, as part of its effort to widen participation in the equity offer.
The offer also includes a green shoe option that allows Dangote Refinery to allot up to 30 per cent of excess shares if the offer is oversubscribed.
Read also:
- Dangote Refinery IPO Oversubscription: What Happens If Demand Exceeds Available Shares?
- Dangote’s Fortune Surges Past $50bn as Refinery IPO Launches
Temi Popoola, Chief Executive Officer of the Nigerian Exchange, said the offer could become one of the largest share offerings in Africa and among frontier markets if the green shoe option is fully exercised.
Fertiliser Output, Cross-Border Listings on the Table
Devakumar said the expansion would cost less than the initial refinery project, which was estimated at $20 billion, because the company would not need to recreate much of the infrastructure developed during the first phase.
He explained that much of the engineering, design and equipment requirements would be replicated, allowing the company to reduce costs associated with the expansion.
Meanwhile, the expansion of Dangote’s fertiliser operations is expected to increase annual production from three million tonnes to 12 million tonnes.
Beyond Nigeria, Dangote Refinery is considering listing its shares on other African stock exchanges, including Johannesburg and Nairobi. A potential cross-border listing outside Africa, possibly in the United States, is also being considered within the next three to four years, following the same signing of IPO documents that set the current expansion in motion.
Industry, Trade and Investment Minister Jumoke Oduwole said a listing of Dangote Refinery on the Nigerian Exchange could increase the market capitalisation of the Nigerian equities market by about $60 billion.
According to the refinery’s offer prospectus, the company recorded $1.8 billion in profit after tax for the six months ended June, while revenue exceeded $13 billion during the period.
The result contrasts with the $476 million net loss reported for the previous year.
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