The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL) Mele Kyari, has insisted that the company is not working against the prosperity of local refineries in the country.
Kyari revealed this while outlining the vision for Nigeria’s energy future at the opening ceremony of the 42nd Nigeria Association of Petroleum Explorationists (NAPE) Annual International Conference and Exhibition themed: “Resolving the Nigeria Energy Trilemma: Energy Security, Sustainable Growth and Affordability” in Lagos, on Monday.
The NNPCL’s GCEO’s clarification comes in the wake of recent controversies between oil marketers and the Dangote Refinery.
However, the GCEO, who was the special Guest of honour at Monday’s event, debunked claims that NNPC Ltd. is sabotaging the efforts of domestic refineries.
Kyari said the NNPCL is part-owners of the Dangote Refinery, stressing that such an investment is a strategic move aimed at strengthening domestic fuel supply.
In a recent interview with Bloomberg, Dangote revealed that the NNPCL was originally meant to take a 20% stake in the refinery, but that has now been reduced to 7.2%.
According to Dangote, the NNPC had initially agreed to a deal worth $2.79 billion, which included an upfront payment of $1 billion.
However, after renegotiating the terms, the corporation decided to reduce its equity share.
“They’ve made a big mistake, but that’s where we are now,” Dangote remarked, emphasising that the agreement is now finalised, with Dangote Group holding the majority of the refinery’s shares.
He said, “We agreed with them and we gave them a good deal. Well, we structured an agreement. The first agreement was that they would pay us $1 billion as part of a deal worth about $2.79 billion. They paid that $1 billion roughly a year and a half ago. The balance of the payment was to be split into two portions:
“The first portion is every time they supplied us with crude (around 300,000 barrels), we would deduct $2 from the balance until the debt was paid off.
“The other portion would come out of their profits.
“However, the NNPC opted out of this structure. They got confused, or maybe there was some misunderstanding. They no longer wanted the crude deduction arrangement and preferred to pay the remaining balance in cash,” Dangote said.
However, giving an update on NNPCL’s relationship with local refineries, Kyari said the state oil company is set to collaborate with private refineries to ensure affordable and sustainable petroleum products supply; and Naira-for-crude transactions in order to stabilise the local currency and regulate forex markets.
This, he added, will bring about an expansion of gas infrastructure such as the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline and the Obiafu-Obrikom-Oben (OB3) Gas Pipelines projects and the development of cleaner energy options, such as Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG).
Kyari also said that the NNPCL has stopped importing refined petroleum product,s and is now off-taking fuel from the Dangote Petroleum Refinery and other local refineries.
“Today, NNPC does not import any product, we are taking only from domestic refineries,” he revealed.
