Adnoc is in talks to buy stakes in refineries owned by Thailand's PTT and Nigeria's Dangot

Adnoc is in talks to take stakes in refineries run by units of Thailand's PTT and Nigeria's Dangote Group, Bloomberg reports, citing people familiar with the discussions. The Thai agreement would pair the stake with crude-supply contracts while giving Adnoc access to fuels from the facilities that it would sell to other buyers, with an agreement possible later this year. The talks with Dangote cover its Nigerian operations, a planned East Africa refinery, and possibly a stake in the pipeline linking it to Kenyan oilfields.

A change in strategy: Adnoc has historically relied on its Ruwais complex at home to supply fuel globally, rather than buying into refineries abroad. The move follows a run of overseas acquisitions, including gas assets via XRG, Covestro, and the Shell Downstream South Africa purchase.

It would put Adnoc on more even footing with Aramco, which holds stakes in several overseas refineries. Ruwais itself, which processes more than 922k bbl / d and ranks among the world's four largest single-site refineries, was knocked offline for four months this year after an Iranian drone strike in March, returning to full capacity only in late July.

The overseas assets would not all serve the same purpose: Adnoc would likely prioritize its own UAE barrels wherever commercially viable, Palash Jain, a Middle East oil consultant, tells EnterpriseAM, with allocations depending on each refinery’s configuration and crude economics. Thailand would remain focused on domestic fuel demand, meaning an equity investment alone is unlikely to significantly increase exports available to Adnoc’s trading arm, he adds.

Dangote offers more room to play both sides of the barrel: A long-term crude supply agreement with Adnoc on competitive terms could strengthen Dangote’s feedstock security and reduce its exposure to spot-market disruptions, Jain argues. The UAE-based firm could gain another outlet for its crude and a stronger presence in West Africa’s downstream market, while access to Dangote’ fuel output could give its trading arm more flexibility to direct cargoes between markets according to regional economics and arbitrage opportunities, he says.

The strategic upside is less about owning refineries than widening the routes around them: The investments could be applied as “complementary to Ruwais,” providing channels to sell crude and earn downstream revenues through assets outside the Gulf during Hormuz disruptions, Jain notes. “However, the ultimate value of the investment will depend on the details, particularly the crude allocation, refinery economics, product optimisation, trading rights and the extent to which AGT can leverage the asset within its broader global trading portfolio,” he adds.

Why it matters: Refinery stakes give Adnoc assured buyers for its own crude and for barrels it trades from elsewhere, while the fuels it gets back build out its trading arm. Dangote's timing matters too: the refinery is about a week from an IPO targeting roughly USD 1.6 bn at a near-USD 49 bn valuation. Nigeria's NNPC has been the refinery's largest outside shareholder to date, but only holds 7.2% — well short of the 20% stake it originally agreed to buy, after it failed to pay the remaining balance. A meaningful stake for Adnoc could make it the biggest outside equity holder in Africa's largest refinery.

The bottomline: “The UAE is no longer subject to Opec production constraints and, with significant spare capacity, its crude production is expected to increase in the coming years. That means the UAE will need to develop additional outlets for its incremental crude and build a broader global customer base,” Jain tells us. Stakes in Thai and African refineries could help Abu Dhabi do both — creating new outlets for its crude while expanding its global downstream footprint, he adds.