Nigeria has taken a major step toward strengthening its position in Africa’s oil and gas industry, as an international energy consortium has secured a $50 billion investment to build what will become the continent’s second-largest oil refinery. The new refinery, planned for Ondo State, will have a processing capacity of 500,000 barrels of crude oil per day and will operate within a 1,471-hectare free trade zone specially designated for the project.
Once completed, the refinery will place Nigeria firmly at the top of Africa’s refining landscape, as the country will host both the largest and second-largest refineries on the continent. The 650,000-barrel-per-day Dangote Refinery in Lagos currently holds the title of Africa’s largest, while Algeria’s Skikda Refinery, with a capacity of about 356,500 barrels per day, is second. The new Ondo refinery is expected to push Skikda into third place.
The project is being developed by Backbone Infrastructure Nigeria Limited (BINL) in partnership with NEFEX Holdings Limited, a Canadian-based energy investment group. According to the consortium, the funding agreement marks one of the biggest private-sector energy investments ever recorded in West Africa. For Nigeria, a nation that has long relied on imported petroleum products despite its vast crude oil reserves, this new development could help reshape the country’s energy future.
The announcement followed the signing of a memorandum of understanding (MoU) between BINL and the Ondo State government, represented by the Ondo State Investment Promotion Agency (ONDIPA). The MoU sets the foundation for the construction of the refinery and the surrounding free trade zone, which is expected to attract other industries and support services.
During a courtesy visit to Governor Lucky Aiyedatiwa in Akure, the BINL leadership team, led by Chairman Ken Nnamani, said the project would create thousands of direct and indirect jobs. They added that the refinery would draw investment into logistics, petroleum storage, shipping, and distribution—industries that often grow around large-scale energy facilities.
Wale Adekola, BINL’s Vice President for Corporate Services, said the consortium’s international partner, NEFEX Petroline, brings decades of experience from refinery operations in the Middle East, Europe, and North America. He explained that NEFEX’s global network, combined with BINL’s understanding of Nigeria’s local terrain, would help ensure the project’s success.
“NEFEX Petroline combines the advantages of a global network with deep local understanding,” Adekola said. “This partnership will drive long-term development, support local industry, and help transform Nigeria’s energy landscape.”
Nigeria’s energy sector has faced decades of challenges, mainly due to the repeated collapse of its state-owned refineries. For many years, the country has exported crude oil only to import refined petrol, diesel, and aviation fuel at high prices. This practice has cost Nigeria billions of dollars in foreign exchange and exposed its economy to fluctuations in global fuel prices.
The emergence of large private refineries such as the Dangote Refinery and now the proposed BINL refinery in Ondo represents a major shift. These projects are expected to increase the availability of locally refined products and reduce the nation’s dependence on imported fuel.
When fully operational, the Dangote and Ondo refineries will have a combined capacity of more than 1.1 million barrels per day. This would be a historic milestone for Africa, a continent that has struggled for decades with inadequate refining infrastructure. Dangote has also announced plans for expansion, with a target of increasing its capacity to 1.4 million barrels per day. If this expansion succeeds, Nigeria’s refining capacity could approach 2 million barrels per day.
For African markets, this is significant. Many countries on the continent rely heavily on imported fuel from Europe, the Middle East, and Asia. The availability of more refined products from within Africa could lower prices, reduce transportation costs, and strengthen economic stability across the region.
Experts say the Ondo refinery has the potential to change the oil and gas landscape in West Africa. Apart from supplying the Nigerian market, the refinery is expected to export petroleum products to neighbouring countries in West and Central Africa. The construction of the free trade zone is also expected to attract manufacturers, petrochemical companies, and other businesses that depend on refined petroleum.
For Ondo State, the project could be a turning point. Although the state has natural resources such as bitumen and gas, it has not always attracted large-scale energy investments. The refinery is expected to generate new revenue for the state government, expand local infrastructure, and support community development.
Governor Aiyedatiwa welcomed the investment, saying that the state is ready to support the consortium and create an enabling environment for the project. He described the refinery as a long-awaited opportunity to boost the state’s economy and create jobs for young people.
Nigeria has faced criticism for its inability to refine enough fuel for domestic use despite being Africa’s biggest crude oil producer. However, with recent developments, the country now has a strong chance of becoming a major regional supplier of refined petroleum.
Energy analysts say the refinery projects are also timely because global energy markets are shifting. Many traditional oil buyers are reducing their use of fossil fuels due to climate policies, creating uncertainty for crude oil exporters. By expanding refining capacity, Nigeria can add value to its crude and diversify its revenue sources.
The combination of the Dangote Refinery and the upcoming Ondo refinery places Nigeria in a strong position to compete with global refining hubs. If the projects operate efficiently, they could meet domestic demand, stabilize fuel prices, and boost the country’s export earnings.
For decades, African nations have exported crude oil only to buy back expensive refined products—a paradox that has weakened economies and drained foreign reserves. The new projects in Nigeria signal a major shift. Africa is beginning to refine its own oil at scale, reduce dependency on foreign supplies, and move toward energy self-sufficiency.
With the $50 billion investment now secured, all eyes will be on Ondo State as construction begins. The refinery is expected to reshape Nigeria’s oil sector, contribute to job creation, and help reposition Africa as a key player in the global energy market.
