FRESH: NNPC To Get 20 Percent Stake In Dangote Refinery—The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari has said that Nigeria is planning to owe 20 percent in the nearly completed Dangote refinery.
In an interview on ARISE TV breakfast program ‘THIS MORNING SHOW’ monitored by GENIOUS MEDIA, the NNPC boss said the investments will not be drawn from the government purse but through borrowing and would be repaid on the back of the cash flow to be generated from the investment. He assured that the NNPC is a business entity owned by over 200 million Nigerians and Nigerians would be carried along through the processes of acquisition of the said stake.
Kyari further explained that due process would be followed to the letter in arriving at the acquisition destination which must see through the approval of the Federal Executive Council for endorsement and for transparency.
Talking about the magnitude and viability of the chain of businesses involved in the Dangote refineries establishment, the group MD said further that the government is taking advantage of a business opportunity with a strong portfolio and that no country will do the mistake of allowing such a massive project of energy proportion to run without the government having a seat on the board.
He said, “This company (NNPC) is owned by the country and 200 million Nigerians and so we are doing this on their behalf. We will take this to the Federal Executive Council and get their endorsement because we believe this is the right thing to do. We are not exposing this country; we are making something that is beneficial for this country. “No country will do that mistake of allowing such massive project of energy proportion to run without the government having a seat on the board. When you have the Refineries working in your country, it does one thing-it takes out the cost of freight when you are buying this product from other countries. So at least N21 per liter of petroleum products will be reduced.”
Kyari said the government is operating a highly transparent internationally approved operation which never been experienced in his nearly 35 years in service. He said “We are following international approved processes. No bank is going to give you a kobo if you don’t follow these processes. We are not taking government money to buy this equity. We are going to borrow on the back of the cash flow that will come from the Refinery, on the back of our transactions, equity and dividend that will come from this business”.
The NNPC GMD explained that with the Dangote Refinery projected to deliver about 50 million liters of petrol to the country, coupled with the take-off of the Port Harcourt, Wari, and Kaduna Refineries’ project, Nigeria would become a hub of petroleum products in the continent. Adding that the date slated for delivering the Port Harcourt, Kaduna, and Warri Refineries in 40 months is not a political statement, but a technical date. He said, “This Refinery will deliver at least 50 million liters of PMS into the Nigerian market and there is no country anywhere that will sit and watch such enormous investments that are related to energy security anywhere in the world to look by the side. No one does this.
“We as a National Oil Company has the responsibility to ensure energy security for this country and the meaning of this is that you must secure the supply sources. And we have been trying to fix our refineries, we have awarded the contract for the fixing of the Port Harcourt Refineries well ahead of the planned schedule.
“The Warri and Kaduna Refinery, we will issue the APC very soon and hopefully before the end of July. That will come parallel and we will deliver all of them around the same time. So the net effect is that you are going to have a petroleum product supply hub for West Africa.
“That means with the NNPC Refineries in place and Dangote Refineries operating and with other initiatives that we are making, we are going to have a massive hub of petroleum products in West Africa.
“This will change the flow of product supply in the whole globe.”
He said on the practicality of the 40 months readiness of the other four refineries that “It is not a political date, it is a technical date and we know this is practical and we know this can be done. Yes, it will make political sense to deliver it during the life of this administration and I know that I have never seen this level of commitment from previous administrations.”
NNPC in May received the approval of the Federal Executive Council to rehabilitate the Port Harcourt Refinery which its crude processing capacity is 210,000 barrels per day. The approval cost was put at $1.5bn with $1bn from Afreximbank and from $500m budgetary provisions. An Italian company, Tecnimont SPA, will be handling the renovation.