Reactions have trailed the recent report indicating that the Nigerian National Petroleum Corporation intends to buy a 20% equity stake in the Dangote refinery. The refinery which has been under construction for some years now with its resumption date shifted thrice now has a 2022 date for launch.
The Dangote refinery is reputed to be Africa’s biggest and the world’s largest single-train plant. According to Thisday, the NNPC Chief Operating Officer, Refining and Petrochemicals, Mr. Mustapha Yakubu made the investment plans known at the end of a two-day Nigeria Oil and Gas Opportunity Fair (NOGOF) tagged: “Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil and Gas Industry.”
Mr. Yakubu stated during the virtual event that one of its divisions, the Greenfield Refining Projects DIvision (GRPD) 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 the 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 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.”
When that comes on board, it will also wet the nation for us.”
But the development has elicited mixed reactions from Nigerians, some of whom are of the opinion that a regulator shouldn’t be found buying a stake in a business it ought to oversee. Some reactions monitored by Exclusive Africa are published below:
This could be why Dangote invested his family’s fortune in the US.
— Njoli Patrick (@_njoli) May 27, 2021
No.
He has a family office and the US markets are hot right now so it makes sense to hold $ and earn more pic.twitter.com/rYomIxgdF3
— Kalu Aja (@FinPlanKaluAja1) May 27, 2021
The government owns an existing set of non-operational refineries consuming huge amounts in turnkey maintenance, while contributing little, if anything, to the economy.
Should those not be sold?
Is this purchase being financed through more debt?
— Victor Nosa Uwaifo (@VNUwaifo) May 27, 2021
I hope this investment by the NNPC (Nigeria Government) is not a way to directly shut off every other investor or player in the sector and hand over the monopoly exclusively to Dangote like we have with some products with similar huge demands and profit margins.?
— Keziem (@Kez74Ollawa) May 28, 2021
This is a strategic move similar to the NLNG. Allowing the business run by private investors with Govt maintaining minority interest to ensure continuous flow of revenue from petroleum refining. I wont be surprised if those dead refineries are eventually sold to Dangote. Good One
— AbbeyCity (@AbiolaSanni) May 27, 2021
Ning own is different,in that one everyone came together and agreed to build it,but this one dangotw has done everything,and has already started building,then govt comes and wants equity
— Dappa (@Dappab) May 27, 2021
Honestly, from first view, this looks like a smart move from both ends. The FG trying to get a seat on the table while also ensuring petroleum products supply secured when the refinery comes on stream. Dangote recouping part of initial investment,
— Olawale Ajayi (@IamOlawaleAjayi) May 28, 2021
Nnpc funding dangote refinery.
Pretty much FG giving him money to complete his project.
He will buy that stake off NNpC back if it works out well, if it doesn’t, we have given Musa the mountain.— Somebody’s Daddy (@mister_olumide) May 27, 2021
May not be a bad idea but I wonder how this affects competition…
— 0xStaySafu! (@fblazerldn) May 27, 2021
Conflict of interest comes to mind.
How can a supposed regulator be a part owner of an entity they are supposed to regulate?— M.O.S.E.S. (@mosesIMOMOH) May 27, 2021
NNPC isn't a regulator. DPR is the regulator.
— Séríkí Aláṣela (@FATHERMYSTERY) May 27, 2021
Like a state can build a toll gate with state funds and loans, then a private entity can acquire the toll gate from the state for far less than what it cost the state in loans and all.
— Somebody’s Daddy (@mister_olumide) May 27, 2021
Big oil is taking a massive hit. Smart investors know to sell at peak of the market. I surely would also cash in now, and let others content with oil fallout later 🥂🥂🥂
— VictorU (@UtedziV) May 28, 2021
I have been thinking that this is surely going to happen, all my predictions about this government is just coming out true. What a country?
— luckyUche (@Luckymanuc27) May 27, 2021
https://twitter.com/OnneOturkpo/status/1397994063001964546?s=20
