Malam Mele Kyari, Group Managing Director of NNPC

Why NNPC is acquiring 20 percent equity in Dangote Refinery ─GMD

*There is no resource-dependent country having a business of this scale, which borders on energy security with implications for fiscal security without your having a say ─Mele Kyari, Group Managing Director, Nigerian National Petroleum Corporation

Isola Moses | ConsumerConnect

Long publicised as an iconic project for energy security in the West African country, the Nigerian National Petroleum Corporation (NNPC) has disclosed the rationale for purchasing a 20 percent stake in the Dangote Oil Refinery.

Malam Mele Kyari, Group Managing Director (GMD) of the Corporation, who stated this Tuesday, June 29, 2021, while featuring on a Channels TV programme monitored in Lagos, said the decision was taken in regard to the strategic importance and profit potential of the refinery business being activated by multibillionaire and Africa’s richest man Alhaji Aliko Dangote.

Oil refinery

Recall the NNPC had announced May 2021, that it plans to acquire a 20 percent equity stake in the oil company.

ConsumerConnect reports the Dangote Refinery, located in the Lekki area of Lagos, the commercial hub of the country, expected to begin oil production 2022 with an installed 650,000 barrels per day capacity.

The oil refining facility is reported to have been touted as a groundbreaking project for energy security in both Nigeria and on the African continent.

Malam Kyari said: “There is no resource-dependent country that will watch a business of this scale, which borders on energy security and has implications for fiscal security of the country, and you don’t have a say.”

The NNPC GMD contended that the decision to seek a stake in the facility was primarily driven by the profit potential of the Dangote Refinery business.

He stated: “For the Dangote Refinery, we are not taking government money to buy it, which is the mistake that people are making.

“We are borrowing on the back of the cashflow of this business.”

Kyari further noted: “We know that this business is viable, it will work, and it will return dividends.

“It has a cash-flow that is sustainable because refinery business, in the short term, will continue to be sustainable.

“That’s why banks have come forward to lend to us, so we can take equity in this.”

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