Government’s approval of NNPC’s investment in Dangote Refinery commendable ─Experts

*Oils & Gas professionals and economists have applauded the Nigerian National Petroleum Corporation’s $2.76billion investment as a considerable support to Dangote Group, which has the world’s largest single train refinery located in the country

*Dangote Refinery has recorded 90 percent completion, and is expected to address the challenge of petroleum products importation into Nigeria and other African countries, says Giuseppe Surace, Chief Operations Officer, Dangote Oil Refining Company

Isola Moses | ConsumerConnect

Nigeria’s Federal Executive Council’s (FEC) recent approval of the Nigerian National Petroleum Corporation’s (NNPC) acquisition of 20 percent minority stakes in the Dangote Petroleum and Petrochemical Refinery has received the applause of some economists and oil and gas experts in the country.

The professionals made their views known in separate interviews with the News Agency of Nigeria (NAN) Thursday, August 5, 2021, in Lagos.

ConsumerConnect had reported H. E. Chief Timipre Sylva, Honourable Minister of State for Petroleum Resources, Wednesday, August 4, had announced the approval of the 20 percent stake after the virtual FEC meeting, which Vice-President (Prof.) Yemi Osinbajo presided over in the Presidential Villa, Abuja, FCT.

The Minister disclosed that said the acquisition is in the sum of $2.76billion by the Corporation.

Chief Sylva said: “The Executive Council also approved the acquisition of 20 percent minority stakes by the NNPC in the Dangote Petroleum and Petrochemical Refineries in the sum of 2.76 billion Dollars.

Prof. Chris Onalo, Registrar and Chief Executive Officer (CEO), Institute of Credit Administration, responding to the development, said that oil and gas remains the major source of revenue for the government, which requires massive investment in the sector.

Onalo said the Dangote Group had taken the bull by the horns to make a huge investment that was needed to jumpstart the industry, and therefore, needed the support of all and sundry, including the government.

The investment from the NNPC was to support the billions already committed by Dangote Group in the world largest single train refinery, he stated.

The Institute of Credit Administration Registrar and CEO said: “The refinery is an expression of massive confidence in the oil and gas economy of this country.

“It shows that the sector can take Nigeria out of economic woes. I think it is a welcome development and those of us who are in the public domain can’t wait too long to see that happening.

“So, I will say kudos to the Dangote Group for its investment drive across the economy of this country.”

According to him, the NNPC support to the refinery, and others coming on stream soon would increase investors’ confidence in the sector, thereby attracting the more investments.

Likewise, Dr. Muda Yusuf, an economist and immediate past Director-General of the Lagos Chamber of Commerce and Industry (LCCI), commented that Dangote Refinery is of strategic national importance.

Yusuf stated: “My views have always been that even though this is a private sector project, it makes both commercial and nationalistic sense for NNPC to express an interest in it.

“This project has a good prospect to put an end to fuel importation and the associated leakages of public funds while also preserving our foreign exchange reserves.”

He also remarked that the upcoming refinery would also stimulate the economy in areas, such as job creation, agriculture and exportation of petrochemicals to other countries.

“The proposal by NNPC to take 20 percent equity stake in the Dangote Refinery is a move in the right direction.

“The reality is that the Dangote Refinery is a project of significant and strategic national importance, even though it is promoted by the private sector,” he said.

The ex-LCCI Director-General further said: “Taking a stake in the project also makes a great deal of business sense, especially given how far the project execution has gone and our heavy dependence on importation of petroleum products.

“It also makes both commercial and nationalistic sense for NNPC to express an interest in a project that has a good prospect to put an end to fuel importation and the associated leakages of public funds.

“It would also ensure the preservation of our foreign reserves as we currently spend billions of dollars annually on importation of petroleum products.”

The economist also stated that besides the several multiplier effects of the refinery arising from related spin-off industries like petrochemicals, fertilizer plants resonates well with the country’s aspiration for self-reliance and backward integration.

The export prospects of the Dangote Refinery are also quite bright, Yusuf noted.

He added: “It is a model that shields the investment from interference by politicians and bureaucrats.

“This proposition is much better than the decision to commit scarce public funds to the rehabilitation of decrepit government owned refineries.”

Mr. Wilson Opuwei, Chief Executive Officer of Dateline Energy Services Limited, also said that the approval was a step in the right direction for the country.

Opuwei said: “It makes sense for the NNPC to invest in ventures that will bring returns to the company. Every business need good investments and this is what the NNPC is doing with the Dangote Refinery.

He stated that the refinery would ensure energy security as the refinery is capable of meeting Nigeria’s gasoline requirements, while generating revenue in hard currency from export of diesel, jet fuel and polypropylene among others.

Mr. Giuseppe Surace, Chief Operations Officer (COO), Dangote Oil Refining Company, told the visiting experts that the refinery is designed to process a variety of light and medium grades of crude, including petrol and diesel as well as jet fuel and polypropylene.

Surace said that the refinery was billed 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 yearly.

This is in addition to having a fertiliser plant, which would utilise the refinery by-products as raw materials.

The COO disclosed that Dangote Refinery, which has recorded 90 percent completion, is expected to address the challenge of petroleum products importation into Nigeria and other African countries.

“If you look at the overall percentage completion, we have achieved good, considerable progress.

“But that overall includes engineering and design, which is 100 percent over,” said he.

Kindly Share This Story