The Nigerian National Petroleum Corporation has announced plans to acquire a 20% equity stake in Dangote Refinery, Lagos.
Gatekeepers News reports that the Nigerian National Petroleum Corporation (NNPC) has shown interest in acquiring a 20 percent minority equity stake in Africa’s biggest oil refining facility, Dangote Refinery, Lagos.
The 650,000 barrels per day (bpd) integrated refinery is reputed to be the world’s largest single-train plant.
The refinery, owned by Nigeria’s Dangote Group is worth about $15 billion and is expected to process a variety of light and medium grades of crude, including petrol and diesel as well as jet fuel and polypropylene.
NNPC Chief Operating Officer(COO), Refining and Petrochemicals, Mustapha Yakubu, disclosed the investment plans on Wednesday at the end of a two-day Nigeria Oil and Gas Opportunity Fair (NOGOF), 2021, tagged: “Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil and Gas Industry.”
This followed the Department of Petroleum Resources (DPR) targets of generating and remitting about N900 billion into the Federation Account in the second quarter of 2021.
Yakubu at the virtual event stated that discussions were already ongoing with the Dangote Group for the acquisition of the stake, adding that the Greenfield Refining Projects Division (GRPD) was handling the negotiations.
According to him, the collaboration will further ensure undisrupted product supply to Nigerians when the deal materialises.
He said: “We have what we call the green field refinery and the Greenfield Refining Projects Division (GRPD) of the NNPC. What we do, our strategy is to collaborate and seek strategic partnerships with private investors.
“At the moment, we have Dangote Refinery, which is the 650,000 capacity barrels per day plus a mini 80,000 tonnes per annum petrochemical plant.
“What are we doing there? I can tell you today that we are seeking to have a 20 percent minority stake in Dangote Refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery.
“That’s 650,000 barrels, going into a single crude distillation unit (CDU).
When that comes on board, it will also wet the nation for us.”
He revealed that the corporation is also interested in partnering with the African Refinery in Port Harcourt, a co-location facility, the CNCEC Chinese group, which is interested in building two refineries in Nigeria, the Waltersmith modular plant, in addition to collaborating with Azikel refineries on condensate production.
Yakubu stated that irrespective of the global push for renewables, Nigeria has a local, domestic and regional market for hydrocarbons, adding that Africa will continue to rely on fossil fuels at least in the next 20 years.
According to him, the net-zero emissions scenario by 2050 which was predicted by International Energy Agency (IEA) will not stop the country from doing nothing with its hydrocarbons.
The COO said, “Today when you are bringing products into Nigeria, they disappear to neighbouring countries. There’s nowhere in countries around Nigeria that they sell fuel for less than N400 per litre. So, there’s a market.”
Yakubu while speaking on the country’s non-functional refineries said there was a deliberate effort to power the refineries down.
He added that this was because of the need for full rehabilitation beyond the regular turnaround maintenance.
According to him, “We believe the only way to do that is to power them down to reduce some of the cost. We have heard that we are spending so much money on the refineries, yet they are idle.
“Of course, there are costs associated with idle refineries; we have staff salaries and remuneration and then the power plant utility operations. And also we need to maintain the plants in terms of preservation and lost investments because they are assets that we believe can be brought to life.”
Yakubu explained that the NNPC was exiting the running of the country’s four refineries, and has recently called for bids from competent and qualified contractors for that purpose.
The COO added that NNPC was not in the best position to run the refineries and has opted for a new model, Operation and Maintenance (O&M) for the running of the facilities.
He said Expression of Interest (EoI) for organisations that would run the refineries was already out and many people had been evaluated and expressed optimism that the NNPC will choose the best contractors to handle the project.
Earlier on Wednesday, the Director of DPR, Sarki Auwalu, at a strategic management session with the management of the Nigeria Extractive Industries Transparency Initiative (NEITI) said the agency is targeting to generate and remit about N900 billion into the Federation Account in the second quarter of the year.
Gatekeeper News also gathered that the DPR has also received over $20 billion investment proposals since the inauguration of the Oil and Gas Excellence Centre (NOGEC) in Lagos by President Muhammadu Buhari.
Auwalu said the agency exceeded its first-quarter revenue generation target by 6.99 percent and that the actual amount it remitted was N452 billion.
The NEITI team led by its Executive Secretary, Dr. Orji Ogbonnaya Orji, said the team came to seek partnership with DPR on how to collectively ensure transparency and create value for Nigerians through the country’s oil and gas sector.
Auwalu added, “January to March, we exceeded our target by 6.99 percent. Actual collection, first quarter, N452 billion already sent to government and between April, May, and June, I think if we are lucky, we will double this.
“It is expected to be around N900 billion, which is the budgeted figure. We are trying our best to support this government to make sure that this government really works for Nigerians.”
The DPR boss said the agency was serious about recovering whatever was due to the government which could be through withholding service instruments and penalties, adding that more royalties would be preferred as a business enabler and a revenue generator.
