NNPC to Borrow $3.8bn to Acquire Dangote Refinery Shares

The 650,000 barrels per day refinery, located in Lagos State, tentatively valued at about $19 billion, is expected to come on stream in 2022 and will produ

The Nigerian National Petroleum Corporation (NNPC) is planning to borrow $3.8 billion to actualize its agenda of acquiring a 20 percent stake in Dangote Refinery. NNPC Group Managing Director, Mallam Mele Kyari, said the money would be borrowed from financial institutions. He said some financial institutions had already agreed to fund the acquisition, while the debts would be paid back from the NNPC’s earnings from dividends and profits accruing from its investment in the fuel plant.

Kyari spoke just as the Organisation of Petroleum Exporting Countries (OPEC) Secretary-General, Dr. Sanusi Barkindo, expressed optimism over the overall conditions of the oil market as the cartel and its allies yesterday began a meeting to herald a resolution on whether to further ease crude oil production curbs.

According to Kyari, there are no underhand dealings concerning the extent of the transaction, as the federal government’s presence on the board of the Dangote Refinery will not only secure its energy needs but give it a strong voice in the running of the asset to guarantee the country’s security. Kyari added that the NNPC has a responsibility to ensure a constant flow of fuel, and as a policy, it will continue to acquire stakes in any refinery in excess of 50,000 barrels per day.

He assured the public of openness on NNPC’s relationship with the Dangote Refinery, adding that while crude oil will be sold to the company in naira, the Central Bank of Nigeria (CBN) will sort out at what value it will come. He said the Dangote Refinery would take off spending of freight of about N21, ensure proximity to supply where it can reach anywhere within the country in one day, while dividends will be shared to Nigerians, who are the owners of the corporation.

On the landing price of petrol, he stated that as of two days ago, it was N256 per liter but added that the pump price of fuel will not be increased in the next two months as engagement with the organized labor has not been concluded.