Dangote Industries Ltd has said that 3 oil firms from Western and Middle Eastern countries, including the Nigerian National Petroleum Corporation (NNPC) have indicated interest in acquiring a stake in Dangote Refinery, Africa’s largest oil refinery.
It said that the firms, which are involved in trading and crude oil production, are looking to secure crude supply agreements, a similar objective to that pursued by the state oil giant, the NNPC.
According to Reuters, this disclosure was made by the Group Executive Director of Dangote Industries Ltd., Edwin Devakumar, in a telephone chat on Friday, May 28, 2021.
Edwin said, “They are seeking to have 20% minority stake in Dangote refinery as part of collaboration … so that they can sell their crude.’’
He said Dangote refinery was not looking for equity, and that the company wanted to be able to secure crude from the market.
Edwin said the refinery was scheduled for mechanical completion this year, with commissioning by January 2022.
Due to the moribund state of the four government-owned refineries, Nigeria, Africa’s biggest crude oil exporter, imports virtually all of its fuel. This has probably led to the interest shown by the NNPC in the 650,000 barrel per day (BPD) Dangote refinery.
What you should know
Nairametrics reported recently that the NNPC had announced plans to acquire a 20% minority equity stake in the $19.5 billion Dangote Refinery, Lagos.
The disclosure was made by NNPC Chief Operating Officer, Refining and Petrochemicals, Mr Mustapha Yakubu, while speaking at the end of the two-day Nigeria Oil and Gas Opportunity Fair (NOGOF), 2021, stating that one of its divisions, the Greenfield Refining Projects Division (GRPD), was handling the negotiations with Dangote Refinery.
The company has held talks with firms including Vitol and Trafigura over the supply of crude and lifting of petroleum products for sale abroad.
Nigeria lost its biggest customer, the United States after it started producing shale oil. The U.S. is now pushing into some of Nigeria’s most valued markets, Edwin said.