As Nigeria's Dangote refinery nears record IPO, investors focus on oil supply costs

Nigeria's Dangote Refinery, the largest on the continent, is expected in October to seek to raise around $5 billion in ​Africa's biggest IPO listing yet, after months of strong earnings, boosted by the disruption caused by the Iran war.

For potential ‌investors, the question is whether Dangote, majority-owned by Africa's richest man, Aliko Dangote, can avoid squeezing its profits while sourcing enough crude oil for its plans to double capacity within three years, in part funded by the initial public offering.

"If Dangote’s only supplier of oil is Nigeria ... this does increase the risk of the ​refinery as an investment," Rob Thummel, senior portfolio manager at U.S.-based Tortoise Capital Management, said.

Dangote does not disclose its margins, ​but as a whole the refining industry has benefited from higher profits since the disruption in the Middle East increased ⁠demand for alternative sources of fuel.

Dangote was particularly well-placed to meet demand across Africa and beyond. A new, efficient refinery, it reached its ​initial maximum capacity of 650,000 barrels per day in February, just before U.S.-Israeli attacks launched the war on Iran.

The refinery has already tested ​production at 700,000 barrels per day.

It is also working on diversifying its sources of crude.

THE COMPLICATIONS OF BUYING NIGERIAN CRUDE

Ideally, Dangote would rely on domestic oil, especially when Nigeria, with output of 1.6 million bpd, is Africa's biggest producer.

The reality is that much of Nigeria's state oil firm the Nigerian National Petroleum Company Limited's ​joint‑venture crude is tied to oil-backed loans and pre‑export deals, reducing the amount it has available for Dangote.

The NNPC does not disclose its ​obligations, but David Bird, chief executive of the Dangote refinery, told Reuters imports account for about 30% to 40% of crude intake.

Dangote crude imports hit peak in May as supply sources diversify

Nigeria cemented its position as Dangote's main crude supplier this year, replacing declining U.S. volumes. At the same time, the refinery broadened its sourcing to include more barrels from Libya, Angola, Ghana, Guyana and Cameroon.

The problem is one of ‌economics as ⁠well as of availability.

"Challenges in accessing feedstock at competitive prices would increase costs and compress margins and utilisation rates, impacting the refinery's commercial performance and therefore its valuation," said Mikolaj Judson, analyst at risk consultancy Control Risks.

The crude Dangote buys from other African countries, as well as more distant producers, including the United States and Guyana, is priced in dollars.

Some domestic Nigerian crude is priced in naira, but is still ​expensive, Dangote says, as the NNPC ​prices Nigerian crude against international ⁠benchmarks such as Brent that include freight and logistics costs even though domestic refiners do not incur them.

Group Vice President of Dangote Industries Limited Edwin Devakumar told Reuters that certain Nigerian cargoes were more expensive ​than comparable imports without giving precise figures.

The grades Dangote has imported include U.S. WTI Midland crude, ​which has generally traded ⁠above Nigerian grade Bonny Light in 2026, according to S&P Global Energy Platts data.

Nigerian authorities say they are seeking to improve the flow of local crude.

Oritsemeyiwa Eyesan, chief executive of regulatory body the Nigerian Upstream Petroleum Regulatory Commission, said authorities were exploring a crude swap system that would match ⁠refiners with ​local producers to reduce delivery times and ease logistics.

Dangote's coastal location, meanwhile, gives it ​flexibility to import supplies.

"The main risk is the cost of importing these barrels," Wood Mackenzie analyst Alan Gelder said.

By Isaac Anyaogu, Reuters

President Tinubu orders rescue operation after mass kidnapping at mosque

Nigerian President Bola Tinubu ordered the military ​and other security agencies on Tuesday to launch an immediate rescue operation after scores of people were kidnapped by gunmen in north-central Niger State last week.

An armed group posted a ​video on ‌Facebook and WhatsApp showing what residents said were about 600 ⁠women, children and older people abducted during an attack on a mosque in the state.

Reuters could not independently verify ‌the figure, but if confirmed it would rank among Nigeria's largest and most audacious ⁠mass kidnappings in recent years.

An official from Borgu district, where the attack happened, said 30 people had been killed during the attack and were ​buried on Sunday.

The official, who declined to be identified because she ‌was not authorised to speak to the media, said villagers from the communities of Dakera, Gidan-Zana and Sabon Gida were affected.

'We will defend our people'

In its first public comments on ‌the incident, the presidency condemned the attack as cowardly and vowed that those responsible would be brought to justice.

"Terror will not ​cow Nigeria. We will defend our people, protect our communities and uphold the sanctity of human life," Tinubu said in a statement.

Tinubu directed security chiefs to provide regular ​updates on efforts to rescue the abductees and account for all those taken.

Abubakar Umar, the ​traditional head of Dakera community, said at least 2,000 people ​fled into neighbouring Benin Republic following the attack.

Obed Nana, Niger state commissioner for information, told Reuters by phone that authorities were ​still trying to verify the number of missing people.

"I don't want to be too speculative about it because you know how sensitive such information can be," said Nana.

Mass abductions for ransom have become common in parts of northwestern and north-central Nigeria, where heavily armed criminal ⁠gangs frequently raid villages, schools and highways.

The groups often hold captives for weeks or months while demanding ⁠large ransoms and ​have increasingly expanded their operations beyond traditional strongholds in the north.

France24

From fighting terrorists to protecting oil, US-made hardware finds a new role in Africa's largest oil-producing nation

That role is now expanding, with American-made technology increasingly being used to protect Nigeria's oil infrastructure and maritime assets.

The latest example is a deal between US-based Textron Systems and Nigerian security company Tantita Security Services Nigeria Limited for the supply of Aerosonde Mk 4.7 unmanned aerial systems.

The aircraft will be integrated into Tantita's command-and-control centres to strengthen surveillance, intelligence gathering and maritime security operations around Nigeria's oil and gas infrastructure.

The development comes as Nigeria's oil industry shows signs of recovery after years of production losses linked to crude theft, pipeline vandalism and operational disruptions.

From counterterrorism to oil security

The shift is significant because it broadens the role of US-made security technology in Nigeria.

American defence equipment has been deployed in Nigeria's counterterrorism efforts, particularly as the country has battled Boko Haram, Islamic State West Africa Province and other armed groups in the northeast.

But the country's oil industry presents a different security challenge.

Nigeria's oil infrastructure stretches across the Niger Delta's creeks and waterways and into offshore areas, making it difficult to monitor through conventional patrols alone.

The Aerosonde Mk 4.7 gives security operators an aerial surveillance capability that can cover large areas and provide intelligence to command centres. Its vertical take-off and landing capability also allows it to operate without conventional runways.

For Tantita, the system can complement its existing maritime and physical security operations, giving personnel greater visibility over oil-producing areas and infrastructure.

Oil production is recovering

The deployment comes against the backdrop of improving oil production.

Nigeria's crude output reached 1.56 million barrels per day in June 2026, according to the Nigerian Upstream Petroleum Regulatory Commission, its highest level since April 2020. Including condensates, total production reached 1.735 million bpd.

Crude output had increased from 1.483 million bpd in February to 1.546 million bpd in March and 1.663 million bpd in April, before reaching 1.70 million bpd in May.

NUPRC attributed the improvement to stable production operations, fewer major pipeline outages, better production uptime and improved crude evacuation.

The regulator has also highlighted the contribution of security and technology to the broader recovery.

At the company level, businessman Tony Elumelu, founder of Heirs Energies, recently said his company now recovers 98% of the crude produced from its facilities, a significant improvement from the losses previously suffered by operators in the region.

The figures cannot be attributed directly to the Textron-Tantita deal, which was announced in December 2025. Instead, they show the wider environment in which the US technology is being deployed.

Nigeria is increasingly combining physical security, intelligence, surveillance and technology to protect the crude it produces.

For the US, that creates a role beyond traditional military cooperation. American-made systems are becoming part of Nigeria's effort to protect a strategic economic asset and increase the amount of oil that reaches the formal production and export chain.

The shift effectively takes US-Nigeria security cooperation from the battlefield to the oilfield, with American technology now playing a growing role in protecting the infrastructure that underpins Nigeria's economy.

By Solomon Ekanem, Business Insider Africa

Nigeria launches national cloud taskforce

Nigeria has moved from sovereign-cloud policy to implementation with the inauguration of the country's National Sovereign Cloud Initiative Implementation Taskforce (NSCI-ITF).

This initiative is aimed at bringing greater control over critical data, computing infrastructure and a growing digital economy.

The National Sovereign Cloud Initiative Implementation Taskforce will align regulators, government institutions and private-sector operators, while driving the implementation of technical standards, cloud governance, infrastructure assurance and investment frameworks, according to the National Information Technology Development Agency.

It went on to say that the body will also monitor progress and tackle regulatory and operational bottlenecks that could slow adoption.

The timing is significant. Nigerian organisations are estimated to spend about $850 million annually on foreign cloud infrastructure, money that leaves the country as businesses pay international providers for computing, storage and other digital services.

The dependence also exposes companies to foreign-exchange pressures, external infrastructure disruptions and limited domestic control over where critical workloads are hosted.

Nigeria is now attempting to turn that vulnerability into an investment opportunity.

The Federal Government’s National Digital Cloud Policy targets $750 million in private investment in cloud and data-centre infrastructure over the next 24 months, potentially creating a larger domestic market for data centres, fibre connectivity, cybersecurity, cloud engineering and artificial intelligence computing.

The broader African market shows why the stakes are rising. Kenya has attracted investment in sovereign public-cloud infrastructure in Nairobi, while South Africa has developed a more mature hyperscale and local-cloud ecosystem.

Nigeria’s advantage is its enormous domestic technology market; its challenge is converting that demand into reliable local capacity.

For the NSCI-ITF to succeed, policy alone will not be enough. Nigeria must address electricity reliability, connectivity, data-centre capacity, cybersecurity and the shortage of specialised cloud talent.

If it does, the sovereign cloud could become more than a data-localisation exercise; it could form the infrastructure layer for Nigeria’s next phase of digital and AI growth.

By Samuel Olomu, ITWeb

Dangote refinery drives seven-fold rise in Nigeria petroleum product exports

Seaborne petroleum product exports from Nigeria have grown seven-fold since 2023, as output from the Dangote refinery improved regional fuel trade ​flows and boosted supplies to Europe and Africa, the U.S. ‌Energy Information Administration said on Monday.

Here are more details:

Seaborne petroleum product shipments from Nigeria averaged 561,000 barrels per day in the second quarter of 2026, compared ​with an annual average of 79,000 bpd in 2023, Vortexa ​data showed.

Of those shipments 350,000 bpd were exported during that ⁠period, compared with an annual average of 46,000 bpd in 2023.

Dangote ​Group's Dangote Petroleum Refinery, located in the Lekki Free Zone near ​Lagos, began operations in 2024 and is the country's largest refinery.

With the increased supply of petroleum products in Nigeria from the country's largest refinery, imports fell, exports ​increased, and Nigeria became more self-sufficient in refined petroleum products, EIA ​said.

Product shipments expanded after operations at Dangote began and again following the completion of ‌maintenance ⁠and expansion in February 2026, coinciding with supply constraints out of the Strait of Hormuz, EIA added.

The maintenance increased the facility's crude oil distillation capacity from 650,000 bpd to 700,000 bpd.
Intra-Nigerian shipments rose to 211,000 ​bpd in the ​second quarter ⁠of 2026, up from 81,000 bpd in 2025 and 33,000 bpd in 2023.

Nigeria's seaborne petroleum product exports to ​Europe rose to 130,000 bpd in the second ​quarter of ⁠2026 from 40,000 bpd in 2025 and 15,000 bpd in 2023, while exports to Africa climbed to nearly 120,000 bpd from 89,000 bpd a ⁠year ​earlier.

Nigeria imported nearly 400,000 bpd of petroleum ​products in 2023, and seaborne imports fell to less than 130,000 bpd in the second ​quarter of 2026.

Reuters