The Lagos Chamber of Commerce and Industry (LCCI) has thrown its weight behind the plan by the Nigerian National Petroleum Corporation (NNPC) to acquire 20 per cent minority equity stake in the 650,000 barrels per day Dangote Refinery currently under construction in Lagos
The Director General of LCCI, Dr Muda Yusuf, hinted that such move was a step in the right direction and should be encouraged by Nigerians, adding that the refinery was a strategic facility with the potential to turn Nigeria’s economy around.
The Chief Operating Officer, Refining and Petrochemicals subsidiary of the NNPC, Mr. Mustapher Yakubu, had disclosed the investment plan on Wednesday while speaking at the just concluded Nigerian Oil and Gas Opportunity Fair (NOGOF) 2021 which was held virtually.
Yakubu had said the discussions were already ongoing with the Dangote Group for the acquisition of the stake, adding that the collaboration would further ensure undisrupted product supply to Nigerians when the deal materialised
He noted one of its divisions -the Greenfield Refining Projects Division (GRPD), was handling the negotiations.
The COO had said: “We have what we call the green field 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 capacity barrels per day 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.”
The $15 billion refinery reputed to be Africa’s biggest oil refining facility and the world’s largest single-train plant and expected to come on stream early next year, has been attracting endorsement from the industry stakeholders and economic policy analysts.
The integrated refinery is expected to process a variety of light and medium grades of crude, including petrol and diesel as well as jet fuel and polypropylene.
It is designed to produce up to 50 million litres of petrol and 15 million litres of diesel a day, roughly 10.4 million tonnes of the product, 4.6 million tonnes of diesel, and 4 million tonnes of jet fuel per year, in addition to having a fertiliser plant, which will utilise the refinery by-products as raw materials.
However, reacting to the news of the NNPC’s plan to invest in the facility, Yusuf said: “The proposal by NNPC to take 20 per cent equity stake in the Dangote Refinery is a move in the right direction. The reality is that the Dangote refinery is a project of significant and strategic national importance, even though it is promoted by the private sector.
“Taking a stake in the project also makes a great deal of business sense, especially given how far the project execution has gone and our heavy dependence on importation of petroleum products.
“It also makes both commercial and nationalistic sense for NNPC to express an interest in a project that has a good prospect to put an end to fuel importation and the associated leakages of public funds.
“It would also ensure the preservation of our foreign reserves as we currently spend billions of dollars annually on importation of petroleum products.”
He said in addition to the several multiplier effects of the refinery arising from related spin off industries like petrochemicals, fertilizer plants resonates well with the country’s aspiration for self reliance and backward integration.
He added that the export prospects of the Dangote Refinery were also quite bright.
Yusuf stated that another exciting thing about the investment proposition by the NNPC was that the national oil company would be a minority shareholder and would therefore not take responsibility for the management of the refinery.
He noted that the undoing of Nigeria’s public enterprises had been the quality of management, saying as a country, Nigeria had paid a huge price for this in the form of inefficiency, corruption, wastages and many more.
The LCCI DG further said that the model being proposed with the Dangote refinery was similar in a way to the Nigeria Liquefied Natural Gas (NLNG) Limited’s model, which according to him, remains the best example of how government funds should be invested.