The Nigeria National Petroleum Corporation (NNPC) has explained its decision to acquire 20 per cent equity from the Dangote refinery.
The Group Managing Director of NNPC, Mele Kyari, said the $2.76 billion investment was a strategic business decision that would ultimately benefit the country.
He spoke Wednesday at an interactive session on 2022 to 2024 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) organized by the House of Representatives Committee on Finance.
He said, “Our decision to take equity in Dangote Refinery is a calculated and conscious decision. First, there is no country, a resource-dependent country like ours anywhere where a national oil company will have a venture of this size and magnitude with its very clear security implications, that is situated in a Free Trade Zone, literally, that refinery is not in this country.
“Today, we import 100 per cent of our petroleum products in this country. We now have a venture that will produce close to 50 million litres of petroleum products in this country; energy security in any country including the United States of America to my personal knowledge, keeps stock of petroleum products on the grounds that the government owns it. The government pays for it and keeps it.
“This is a very informed policy decision that will guarantee the security of energy; we will have rights to 20% of production in this facility. Secondly Mr chairman, he (Dangote) has the option to buy his crude from anywhere. So, you can’t force him to buy crude. We structured our equity on the basis of the fact that he must buy at least 300,000 barrels per day of our production.”
He said no country would allow any venture of this nature to exist without having a seat on the Board of such entity.
“Secondly Mr Chairman, this refinery is situated in a Free Trade Zone, which means that there are many incentives granted to this business,” he said.
