20% Equity Stake in Dangote Refinery to be purchase by NNPC

The Nigerian National Petroleum Corporation (NNPC) has announced its intention to purchase a 20% minority equity position in Africa’s largest oil refinery, the Dangote Refinery in Lagos.

When the deal is completed, this will help to assure an undisrupted supply of petroleum products across the country.

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Mr. Mustapha Yakubu, the NNPC Chief Operating Officer for Refining and Petrochemicals, made the announcement at the conclusion of a two-day Nigeria Oil and Gas Opportunity Fair (NOGOF) 2021 titled “Leveraging Opportunities and Synergies for Post-Pandemic Recovery of the Nigerian Oil and Gas Industry.”

According to Thisday, Yakubu said discussions were already ongoing with the Dangote Group for the acquisition of the stake.

What Yakubu is saying

At the virtual event, Yakubu mentioned that the Greenfield Refining Projects Division (GRPD)which is one of his divisions, 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 a 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 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 

Yakubu also mentioned that the state-owned oil company is working with African Refinery in Port Harcourt, a co-location facility, and the CNCEC Chinese group, which is interested in building two refineries in Nigeria, the Waltersmith modular plant and the Azikel refineries, for condensate production.

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Despite the worldwide push for renewables, Yakubu noted that hydrocarbons have a local, internal, and regional market in Nigeria and that Africa will continue to rely on fossil fuels for at least the next 20 years.

He said the country would not just fold its arms and do nothing with its hydrocarbons just because the International Energy Agency (IEA) has predicted a net-zero emissions scenario by 2050.

He said, “Today when you are bringing products into Nigeria, they disappear to neighboring countries. There’s nowhere in countries around Nigeria that they sell fuel for less than N400 per liter. So, there’s a market.’

Important things to note

The Dangote refinery is a 650,000 BPD integrated refinery and petrochemical project now under development in Lagos, Nigeria’s Lekki Free Zone. The Dangote Group owns it, and when completed, it will be Africa’s largest oil refinery and the world’s largest single-train complex.

The integrated refinery and petrochemical project, which is projected to be finished in 2021 despite various delays and would produce 9,500 direct and 25,000 indirect jobs, will meet 100% of Nigeria’s refined petroleum product need and even have a surplus for export when completed.

It will be capable of producing up to 50 million litres of fuel and 15 million litres of diesel per day, or roughly 10.4 million tonnes of fuel, 4.6 million tonnes of diesel, and 4 million tonnes of jet fuel per year, as well as a fertilizer plant that will use refinery by-products as raw materials.

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