The Dangote Group has confirmed that the Nigerian National Petroleum Corporation (NNPC) quest for 20 per cent stake in the its refinery located in Lagos.
A senior executive of Dangote Industries confirmed to Reuters that four oil firms, including the country’s state-oil company had approached it to partially acquire the asset, regarded as Africa’s largest oil refinery.
The group’s Executive Director, Devakumar Edwin, said the firms from Western and Middle East countries involved in trading and crude production were looking to secure crude supply agreements, a similar objective to that pursued by the NNPC.
“They are seeking to have 20 per cent minority stake in Dangote refinery as part of collaboration … so that they can sell their crude,” Reuters quoted Edwin as saying.
He said Dangote refinery was not looking for equity, adding that the company wants to be able to secure crude from the market.
Nigeria, Africa’s biggest crude oil exporter, imports virtually all of its fuel due to moribund state refineries, which has prompted the state oil company’s interest in the 650,000 barrel per day (bpd) Dangote refinery.
NNPC’s spokesman, speaking to Reuters in a phone interview, said the corporation had considered the idea of acquiring a stake in the multi-billion oil refinery project owned by Africa’s richest man, Aliko Dangote.
Edwin said the refinery was scheduled for mechanical completion this year with commissioning by January 2022.
Nigerian billionaire Dangote, who built his fortune in cement, first announced a smaller refinery in 2013, to be finished in 2016. He then moved the site to Lekki, in Lagos, upgraded the size and said production would start in early 2020.
The company has held talks with firms including Vitol and Trafigura over the supply of crude and lifting of petroleum products for sale abroad, Reuters reported.
Nigeria lost its biggest customer, the United States, after it started producing shale oil. The US is now pushing into some of Nigeria’s most valued markets, Edwin said.
THISDAY recently reported that NNPC had announced its willingness to purchase a 20 per cent minority stake in Dangote refinery.
The 650,000 barrels per day (bpd) integrated refinery, expected to process a variety of light and medium grades of crude, including petrol and diesel as well as jet fuel and polypropylene, is owned by Nigeria’s Dangote Group and is worth an estimated investment of $15 billion.
It was 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.