The convener of Oil, Gas, and Power Forum, Madaki Ameh, has described the Dangote Refinery Initial Public Offering (IPO) as a rare opportunity for Nigerians to acquire ownership stakes in one of the country’s major refining businesses.
Ameh said the offer, priced at ₦525 per share, provides Nigerians with an accessible entry point into the oil and gas sector, noting that investors can participate with as little as ₦5,000.
“The Dangote Refinery IPO gives Nigerians a rare opportunity to own a piece of a refinery. Most of us will not be able to build our own refineries in our lifetime, so this is a very good opportunity. The IPO is coming at an extremely good price—at 525 Naira per share, the shares are worth less than $1 (around 30 cents). Nobody would sell shares of an organization like Dangote Refinery for that low.”
Ameh predicted that the offer could attract between 200 and 300 per cent oversubscription within a month and said the shares had the potential to double in value within six months, citing the refinery’s planned expansion from 650,000 barrels per day to 1.4 million barrels per day, as he urged Nigerians to invest.
“Ordinarily, I expect a huge level of interest—maybe a 200% to 300% oversubscription within a month. They have made it easy for anyone to buy; if you have up to 5,000 Naira, you can own a piece of Dangote Refinery. It is a very smart, strategic move.
“From the way this IPO is priced, and considering that the refinery plans to double its capacity from 650,000 barrels per day to 1.4 million barrels per day in a short while, informed investors see that these shares are priced almost like penny stocks with the capacity to double within six months. In an inflationary environment, money kept in the bank loses value. Putting your money here is a prudent choice, as it can grow exponentially within a short time.
“As they say, no risk, no reward. If the risk threshold is low—5,000 Naira can hardly buy a decent meal in this country—and people are not ready to take a chance to buy ten shares, then they are not ready to make money. Nigerians should encourage themselves to be part of this massive business. This is money you make even while sleeping once you have investable funds.”
Addressing concerns over a possible monopoly in Nigeria’s oil and gas sector, Ameh said the fears were minimal, arguing that Dangote should be encouraged for taking the risk of investing heavily in refining when others with refinery licences failed to commit the resources to establish their plants.
“Dangote started this refinery about ten years ago when nobody gave him much of a chance. Dangote took personal courage and committed his own resources, recognizing that the future still required refining. He set up a private refinery that is now operational and delivering value. Now he is going to Kenya to set up another massive refinery in East Africa to handle the oil and gas value chain in that region.
“People complain about a monopoly, but nobody prevented others from doing business. Many people hold refinery licenses today and have not laid a single brick. A man who had the courage to take the bull by the horns should be encouraged to reap the benefits. I fully align with the need to continue encouraging private industry, and Dangote is leading the way in Africa.
“The risks mentioned are minimal when looking at the entire risk profile. Dangote knows how to manage big companies. For a private individual to import and install every component shows immense confidence in this economy. We need many more investors like Dangote doing this level of work,” Ameh told Arise News.
Speaking on measures to strengthen local refining, Ameh proposed that the government sell crude to domestic refiners at wellhead prices of no more than $10 per barrel, saying the move would boost local production and reduce the foreign exchange burden of importing refined petroleum products.
“Since 2012, I have consistently advocated that Nigeria needs a strategic plan to exit OPEC at some point. We have no business selling unrefined crude oil; we should refine everything we produce. Producing between 1.7 and 1.8 million barrels in total is not enough to grow this economy to where it ought to be.
“The country needs to shift the subsidy from the consumption end to the production end. If you sell crude oil at the wellhead cost (which should not be more than $10 a barrel) to local refiners, you energize the economy significantly. This stops the drain on foreign exchange from importing products we can produce in abundance locally.
“The government should encourage Dangote to enter the upstream sector himself to produce the feedstock for his refinery. When he expands to 1.4 million barrels per day and starts production in Kenya, finding enough crude to refine will become difficult.
“If we have serious local refiners, why not farm out acreages in prolific fields and allow them to engage in backward integration? That way, the refinery produces its own feedstock,” he said.
Speaking on the valuation prospects of Dangote Refinery, Ameh reiterated its share value could almost double or more than double by December 2026, driven by strong local and international demand.
“When Dangote says the refinery will be the most valuable by December, he means that based on current projections and demand both locally and internationally, the value of these shares on listing could almost double or more than double by the end of the year.”
Favour Odima
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