NNPC to buy 20% stake in Dangote refinery with loan

Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, has said the corporation plans to take a loan in order to buy 20 per cent stake in the Dangote refinery.

He spoke on Tuesday in an interview on Channels Television’s Sunrise Daily.

He said, “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 cash-flow of this business.”

He also justified the plan to buy a 20 per cent stake in the $11 billion Dangote refinery.

“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,” Kyari said.

He added, “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.”

According to him, the Dangote refinery will come into production by 2022 and deliver over 50 million litres of petrol to the markets.

Kyari said, “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 (refineries) in July, so that all of them will work contemporaneously. The net effect is that you are going to have an environment where Nigeria becomes the hub of petroleum products and supply.

“It’s going to change the dynamics of petroleum supply globally in the sense that the flow is coming from Europe today and it is going to be reversed to some other direction.

“We will be the supplier for West Africa legitimately and also many other parts of the world.”