NNPC reveals how FG’ll finance stake in Dangote Refinery

The Group Managing Director of Nigerian National Petroleum Corporation (NNPC) Mele Kyari, said the government corporation will borrow to fund its stake acquisition in Dangote Refinery.

It can be recalled that last month, NNPC announced plans to acquire a 20 percent minority equity stake in Africa’s biggest oil refining facility, Dangote Refinery, Lagos, to help further ensure an undisrupted supply of petroleum products across the country when the transaction pulls through.

Kyari disclosed that the federation account won’t be usedto finance the deal with Aliko Dangote’s company as NNPC will approachcommercial banks for financial backing.

While Kyari didn’t specify the actual cost of the 20percent stake the corporation wants in Dangote Refinery, he estimated thevaluation, which was made by banks, to be around $19 billion.

The NNPC boss also explained why the state oil giant isbuying a stake in Dangote Refinery.

Kyari said that the decision was driven by the profitpotential of the refinery business and the need to have a say in a business ofthis magnitude, which borders on energy security for Nigeria and Africa, withhuge implications for fiscal security of the country.

He said the NNPC is not using government money to buystakes in the 650,000 barrels per day Dangote Refinery, which is expected tostart production in 2022.

“Dangote refinery will come into production by 2022. And what that will do is to deliver over 50 million litres of gasoline into, to be specific, our markets. We are also working on our refineries, to ensure that we fix them. We have awarded the contract for Port Harcourt refinery rehabilitation. And ultimately we are going to close that of Warri and Kaduna very soon in July so that all of them will work contemporaneously.