Govt-owned NNPC buying stake in Dangote worries oil industry operators

The business side of a commercial Nigerian National Petroleum Corporation (NNPC) acquiring stakes in Dangote Petroleum Refinery excites many downstream operators, it’s the political side that has their stomachs in a knot.

Mustapha Yakubu, NNPC’s chief operating officer, Refining and Petrochemicals, reportedly said discussions were already ongoing with the Dangote Group for the acquisition of a 20 percent stake at a two-day Nigeria Oil and Gas Opportunity Fair (NOGOF), 2021 conference.

Nigeria’s Federal government is committed to seeing the Dangote Refinery succeed. In 2019, Godwin Emiefiele, the Central Bank governor announced a seed capital of N75billion ($300million) to the project valued at $12billion.

The argument is that if the 650,000 barrel per day crude refinery comes on stream, Nigeria will not just be self-sufficient in the production of refined petroleum products, but will become a net exporter of the products earning nothing less than $7.5 billion annually and saving the country billions of dollars.

It is unclear why the NNPC is planning to buy stakes in the competition but many Nigerians will be grateful for a steady supply regardless of the source.

The 650,000 barrels per day (bpd) Dangote 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.