NNPC, 3 others jostle for $12bn stake in Dangote refinery
Four oil firms including the Nigerian National Petroleum Corporation (NNPC) are jostling for a 20 per cent minority stake in Dangote refinery.
The investment decision by NNPC and other oil firms will cost each entity about $3 billion to purchase 20 per cent stake in the $15 billion 650,000 barrels per day(bpd) Dangote refinery
Group Executive Director, Dangote Industries, Devakumar Edwin, said the firms from Western and Middle East countries and involved in trading and crude production were looking to secure crude supply agreements, a similar objective to that pursued NNPC.
“They are seeking to have 20 per cent minority stake in Dangote refinery as part of collaboration so that they can sell their crude,” Edwin said
He said Dangote refinery is not looking for equity but that the company wants to be able to secure crude from the market.
Meanwhile, NNPC said it was taken the investment decision in order to further ensure an undisrupted supply of petroleum products across the country when the transaction pulls through.
This disclosure was made by NNPC Chief Operating Officer, Refining and Petrochemicals, Mr Mustapha Yakubu, while speaking at the end of a 2-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.” held virtually las week
Yakubu said discussions were already ongoing with the Dangote Group for the acquisition of the stake.
Edwin said the refinery is scheduled for mechanical completion this year with commissioning by January 2022.
Dangote has held talks with firms including Vitol(VITOLV.UL) and Trafigura (TRAFGF.UL) over the supply of crude and lifting of petroleum products for sale abroad. Nigeria lost its biggest customer, the United States, after it started producing shale oil. The U.S. is now pushing into some of Nigeria’s most valued markets, Edwin said.
Yakubu, at the virtual event, stated that one of its divisions, the Greenfield Refining Projects Division (GRPD) was handling the negotiations with Dangote Refinery.
He said: “We have what we call the Greenfield 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 barrels per day capacity, 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 per cent 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.”
Yakubu also noted that the state oil giant is collaborating with 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 and Azikel refineries on condensate production.
SOURCE: THE SUN