Page 6 - AfrOil Week 26 2021

AfrOil COMMENTARY AfrOil

Kyari explained that the refinery will “deliver Devakumar Edwin, the group executive
over 50mn litres of gasoline into, to be specific, director at Dangote Industries, said recently
WHAT: our markets.” that the plant will also produce 690,000 tpy of
The increase in Brent He added: “We are also working on our polypropylene, 240,000 tpy of propane, 32,000
crude prices will have a refineries, to ensure that we fix them. We tpy of sulphur and 500,000 tpy of carbon black.
limited positive impact on have awarded the contract for Port Harcourt While there have previously been concerns
the Nigerian economy. refinery rehabilitation. And ultimately we about the level of fuel available to Nigerians from
are going to close that of Warri and Kaduna the facility, Edwin said that products would be
WHY: very soon in July so that all of them will work split between the Nigerian and export markets,
Abuja subsidises domes- contemporaneously.” specifying Europe and South America.
tic fuel prices, so it must Afreximbank has already provided $1bn in Meanwhile, the company has previously pro-
spend more money when funding for the Port Harcourt work – which will vided assurances that the refinery’s purchase of
oil markets are bullish.
rehabilitate the 210,000 bpd complex to around Nigerian crude would not have an impact on the
WHAT NEXT: 90% of its nameplate capacity – with utilisation country’s 1.6mn bpd mandatory export volume
The government has not rates having run at zero for more than 18 months allocated by OPEC.
indicated whether (or ex- because NNPC had not carried out turnaround
actly when) it will change maintenance (TAM) on any of its refineries for All above board
its pricing policy. decades. Also this week, NNPC moved to dispel allega-
During negotiations for that loan, the tions of fraudulence in the plans to acquire a
Cairo-based bank insisted that NNPC hire stake in DORC. Mustapha Yakubu, the NOC’s
a “professional operations and maintenance COO for refineries and petrochemicals, told
company” to run the Port Harcourt units and local media that the plans are all above board
the company announced soon after it would no and legal.
longer operate the facility nor its other refineries “Our attention has been drawn to media
at Kaduna and Warri. reports ascribing to me alleged fraudulent deal-
“For the Dangote refinery,” he said, “we are ing around the plan by the NNPC to acquire
not taking government money to buy it, which equity participation in DORC. The publication
is the mistake that people are making. We are is very embarrassing, disgusting and above all,
borrowing on the back of the cash flow of this horrifying and damaging to my character and
business. We know that this business is viable, it personality as a dutiful officer of the Federal
will work and it will return dividends.” Republic of Nigeria, and more importantly as a
Kyari added: “It has a cash flow that is sus- top management staff of NNPC,” he said.
tainable because refinery business, in the short “I hereby state categorically that I did not
term, will continue to be sustainable. That’s why speak with any news person or organisation on
banks have come forward to lend to us, so we the issue. I wish also to state that, to the best of
can take equity in this.” my knowledge, there is no such plan or fraud-
He explained that NNPC was seeking to ulent motive behind the equity acquisition
expand its portfolio. Additionally, the company arrangement with the DORC or any of the other
has “the responsibility to guarantee energy secu- private refinery that NNPC is in talks with,” he
rity for our country,” he said. added. NNPC is seeking
“That’s why anyone that is going to construct Meanwhile, the executive noted that the to expand its
a refinery that is in the excess of 50,000 bpd, we decision to propose the investment in private
will talk to them, take equity in it, as long as we refineries with a capacity of 50,000 bpd or more portfolio and also
have the money to pay for it,” he added. had followed an evaluation carried out by local
“The net effect is that you are going to have and international experts. guarantee the
an environment where Nigeria becomes the hub “I was part of the team that further evaluated
of petroleum products and supplies. It’s going to the report of the working committees (Technical country’s energy
change the dynamics of petroleum supply glob- and Commercial) and the subsequent adoption security
ally in the sense that the flow is coming from of the plan by the top management committee
Europe today and it is going to be reversed to of the NNPC. This is in concert with the Federal
some other direction. We will be the supplier Government’s overall energy security strategy,”
for West Africa legitimately and also many other he said.
parts of the world,” Kyari said. Yakubu said that the move was part of
Meanwhile, Dangote Group has not yet given broader efforts to bring an end to pipeline van-
any indication of willingness to sell equity in the dalism which has a major financial and envi-
refinery. ronmental cost for the country. “I am strongly
“I’m not sure Mr Dangote wants to sell his in support of the Federal Government’s overall
equity in the refinery. I can confirm that it was energy security strategy, which indeed is part of
at our instance that we started this engagement. my schedule. I will continue to do everything
He did not want to sell his shares in this refinery,” within my power to ensure the realisation of
Kyari added. this laudable Federal Government’s objective,”
Once complete, the facility will process he added.
650,000 bpd of varying grades of light and These efforts include support for modular
medium crudes to produce fuels in line with refining, which has already developed green
Euro-5 standards. These will comprise 10.4mn shoots and appears to be an attractive model for
tonnes per year of gasoline, 4.6mn tpy of diesel integrating marginal fields to ensure their devel-
and 4mn tpy of jet fuels. opment. ™

P6 www. NEWSBASE .com Week 26 30•June•2021