Abu Dhabi National Oil Co. (ADNOC) is in talks to purchase stakes in Thailand's Bangchak Corp. and Nigeria's Dangote Refinery, according to sources familiar with the matter. This strategic move aligns with ADNOC's broader objective of expanding its international refining and petrochemicals operations. The discussions, which are ongoing, could significantly enhance ADNOC's presence in key growth markets.
For the Dangote Refinery, a potential investment from ADNOC would provide additional capital and strategic partnership for the massive 650,000-barrel-per-day facility located in Nigeria. The Dangote Refinery is currently undertaking an initial public offering (IPO) aimed at raising $1.6 billion, with shares priced at 525 naira ($0.40) each. The IPO is scheduled to open on September 14, and the company has already secured a $400 million underwriting commitment. This potential investment from ADNOC could complement the IPO, further solidifying the refinery's financial position and expansion plans.
The Dangote Refinery, built at an approximate cost of $20 billion, is envisioned to double its capacity to 1.4 million barrels per day. The current IPO values the existing 120.13 billion ordinary shares at approximately $47 billion, significantly higher than a private placement in July which indicated a $40 billion valuation. Analysts have noted that this valuation is high compared to similar refiners like Turkey’s Tupras, valued at about $12 billion, and HF Sinclair, valued at about $16 billion. Despite this, Dangote aims for the refinery to generate over $12 billion in earnings before interest, tax, depreciation, and amortisation (EBITDA), making it one of Africa's largest companies.
The potential acquisition of stakes in these refineries underscores ADNOC's aggressive push to diversify its investments and secure its position as a global energy player. For both Bangchak Corp. and Dangote Refinery, a partnership with a major entity like ADNOC could unlock new opportunities for growth, technological advancement, and market access. The outcome of these negotiations will be closely watched by the global energy sector, particularly as ADNOC continues to explore expansion opportunities in emerging economies.
