NNPC has hinted that it’s planning to acquire a share in Dangote Refinery.
Gatekeepers News reports that the Nigerian National Petroleum Corporation (NNPC) is planning to borrow $3.8 billion to actualise its plan of acquiring a 20 per cent stake in Dangote Refinery.
The 650,000 barrels per day refinery, located in Lagos State, South-West, Nigeria and it’s expected to come on stream in 2022 and will produce 50 million litres of petrol per day.
NNPC Group Managing Director, Mele Kyari, said that the money would be borrowed from financial institutions.
He said some financial institutions had already agreed to fund the acquisition, while the debts would be paid back from the NNPC’s earnings from dividends and profits accruing from its investment in the fuel plant.
Kyari said that the refinery had been tentatively valued at about $19 billion.
Kyari, in two separate interviews stated that all the borrowing institutions, including Afrexim Bank, are comfortable with the deal.
He added that the federal government will not invest a dime in the deal.
He said: “I am not sure Mr (Aliko) Dangote wants to sell his equity in the refinery. I can confirm that it was at our instance that we started this engagement and he did not want to sell these shares.
“There’s no resource-dependent country in the world that will watch a business of this scale, bordering on energy security which also has implications for even physical security of our country, and you watch it and you don’t have a say.
“We started this process long before Dangote started his refinery project. We are going to take equities in very significant businesses anchored on the oil and gas operations, for example, fertiliser plants, methanol plants, small condensate refineries and so many other businesses that we are dealing with, so that we can expand our portfolio.
“Even for this Dangote Refinery, we are not going to take government money to buy it. That is the mistake that people are making because they think that we are going to take federation money to pay for these refineries.
“We are going to borrow on the back of the cash flow from this business because we know that it is viable and it will work and return dividends and it has a cash flow that is sustainable.”
Kyari added that the NNPC has a responsibility to ensure a constant flow of fuel, and as a policy, it will continue to acquire stakes in any refinery in excess of 50,000 barrels per day.
