The Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has revealed that the company is obtaining a loan to purchase a 20 per cent stake in Dangote Oil Refinery.
Recall that in May, the NNPC had announced that it planned to acquire a 20 percent equity stake in the private company led by billionaire Aliko Dangote.
Speaking on the move, Kyari said: “For the Dangote refinery, we are not taking government money to buy it, which is the mistake that people are making.
“We are borrowing on the back of the cash-flow of this business.
“We know that this business is viable, it will work and it will return dividends. It has a cash-flow that is sustainable because refinery business, in the short term, will continue to be sustainable.
“That’s why banks have come forward to lend to us, so we can take equity in this.”
Further, he said: “There is no resource-dependent country that will watch a business of this scale, which borders on energy security and has implications for fiscal security of the country, and you don’t have a say.”
He argued that the decision was also driven by the profit potential of the refinery business.
“Dangote refinery will come into production by 2022. And what that will do is to deliver over 50 million litres of gasoline into, to be specific, our markets. We are also working on our refineries, to ensure that we fix them. We have awarded the contract for Port Harcourt refinery rehabilitation. And ultimately we are going to close that of Warri and Kaduna very soon in July, so that all of them will work contemporaneously. The net effect is that you are going to have an environment where Nigeria becomes the hub of petroleum products and supply. It’s going to change the dynamics of petroleum supply globally in the sense that the flow is coming from Europe today and it is going to be reversed to some other direction. We will be the supplier for West Africa legitimately and also many other parts of the world.
“So the meaning of this is, there is an opportunity that has been thrown at us. And I’m not sure Dangote wants to sell his equity in the refinery. I can confirm that it was at our instance that we started this engagement. He did not want to sell his shares in this refinery.”
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