The Nigerian National Petroleum Corporation’s Chief Operating Officer, Refining and Petrochemicals, Mr Mustapha Yakubu, at the end of a two-day Nigeria Oil and Gas Opportunity Fair (NOGOF) titled “Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil and Gas Industry,” said that the NNPC is interested in purchasing a 20% minority equity stake in the 650,000 barrel-per-day refinery.
He stated that talks with Dangote Group for the acquisition of the stake have already begun through one of NNPC’s divisions, the Greenfield Refining Projects Division. The collaboration will help the national oil company achieve its goal of ensuring uninterrupted product supply to Nigerians.
He also mentioned that the company is interested in collaborating with the African Refinery in Port Harcourt, which is a co-location facility, the CNCEC Chinese group, which is interested in building two refineries in Nigeria, the Waltersmith modular plant, and Azikel refineries on condensate production.
Despite the global push for renewables, he highlighted those hydrocarbons have a domestic, local, and regional market in Nigeria. Africa will continue to rely on fossil fuels for at least the next 20 years, he claims. According to him, the fact that the International Energy Agency predicts net-zero emissions by 2050 does not mean the country will not use its hydrocarbons.
Excerpts from his submission:
“We have what we call the green field refinery and the Greenfield Refining Projects Division (GRPD) of the NNPC. What we do, our strategy is to collaborate and seek strategic partnerships with private investors.”
“At the moment, we have Dangote Refinery, which is the 650,000 capacity barrels per day plus a mini 80,000 tonnes per annum petrochemical plant.”
“What are we doing there? I can tell you today that we are seeking to have a 20 per cent minority stake in Dangote Refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery.”
“That’s 650,000 barrels, going into a single crude distillation unit (CDU).”
“When that comes on board, it will also wet the nation for us.”
“Today, when you are bringing products into Nigeria, they disappear to neighbouring countries. There’s nowhere in countries around Nigeria that they sell fuel for less than N400 per litre. So, there’s a market.”
On the non-operational state-owned refineries, he stated that they will be fully rehabilitated, and that the NNPC will cease to operate all of the country’s refineries, as it had already invited bids for competent and reliable contractors to bid for the facilities’ Operation and Maintenance (O&M).
He said: “We believe the only way to do that is to power them down to reduce some of the cost. We have heard that we are spending so much money on the refineries, yet they are idle.”
“Of course, there are costs associated with idle refineries; we have staff salaries and remuneration and then the power plant utility operations. And also, we need to maintain the plants in terms of preservation and lost investments because they are assets that we believe can be brought to life.”