NNPC Insists Nigeria Must Acquire Stake in Dangote Refinery
By Modupe Gbadeyanka
The Nigerian National Petroleum Corporation (NNPC) has insisted that the country must be on the board of the yet-to-be-completed Dangote Petroleum Refinery in Lagos by acquiring a stake in the firm.
Nigeria is planning to pay $2.76 billion for 20 per cent shareholding in the oil facility and the Group Managing Director of NNPC, Mr Mele Kyari, is justifying this deal.
Addressing the House of Representatives Committee on Finance headed by Mr James Faleke in Abuja on Wednesday, Mr Kyari said it would be wrong to allow a private individual or entity to fully own a refinery of such capacity.
The oil facility is being built by Mr Aliko Dangote and it has a capacity of refinery 650,000 barrels of crude oil per day.
Mr Kyari informed the lawmakers that the equity shareholding interest in Dangote Refinery was proposed by the corporation and it was to mainly guarantee national energy security and the best possible options.
“We will have right to 20 per cent of production from this facility. We structured our equity participation on the basis that the refinery must buy at least 300,000 barrels of crude oil per day of our production.
“This guarantees our market at a period when every country is struggling to find a market for their crude oil,’’ he was quoted to have explained in a statement issued by the spokesman of the agency, Mr Garba Deen Muhammad.
Earlier this month, the Federal Executive Council (FEC) approved the request of the NNPC to buy the 20 per cent stake in the private refinery. This followed billions of Dollars approved for the rehabilitation of the four moribund refineries owned by the government in Port Harcourt, Warri and Kaduna.
At the meeting with members of the lower chamber of the parliament yesterday, Mr Kyari also provided a base oil price scenario in the medium term at $57 per barrel for 2022, $61 per barrel for 2023 and $62 per barrel for 2023.
He explained that the assumptions were arrived at after a careful appraisal of the three-year historical dated Brent Oil Price average of $59.07 per barrel premised on Platts Spot Prices.
“Price growth is to be moderated by the lingering concerns over COVID-19, increased energy efficiency, switching due to increased utilization of gas and alternatives for electricity generation. These are reflected in the Medium Term Revenue Framework,” he said.
On the perennial issue of smuggling of petroleum products, Mr Kyari urged the National Assembly to support the agency in battling the menace, noting that based on the directive of President Muhammadu Buhari, it had mobilized some federal agencies like the customs, the Economic and Financial Crimes Commission (EFCC), the police, civil defence corps and others, to find workable solutions to it.
On the propriety of establishing NNPC Retail stations in neighbouring countries to curb the challenge of illegal haulage of petroleum products across the border, Mr Kyari said though the NNPC once considered the option, it had to jettison the idea when it became imperative that the measure would be counterproductive.
He explained that people smuggling the products are not looking for officially priced petroleum products, stating that establishing retail stations would not yield the desired result since the people who take products across the border are not interested in selling at the official prevailing prices at approved stations but are interested in under the counter deals.