Page 6 - DMEA Week 22 2021

DMEA FINANCE & INVESTMENT DMEA

Foreign firms eye stakes

in Dangote refinery

AFRICA FOLLOWING the news last week that the Nige- oil firms are keen to acquire a stake to increase
rian National Petroleum Corp. (NNPC) is con- their global refining footprint while guarantee-
sidering acquiring a stake in the new Dangote ing crude placement into the Nigerian market.
Refinery, the facility’s developer has said that Since NNPC’s potential involvement in the
three foreign companies have also made invest- Dangote unit was reported last week, it has
ment overtures. received a mixed reaction in comments provided
Speaking to Reuters, Devakumar Edwin, by numerous senior Nigerian financial figures to
group executive director at Dangote Industries, local media.
said that his company has been approached by
NNPC and Western and Middle Eastern oil Equity requirement
and trading companies to secure crude supply A few days later, the general manager of NNPC’s
agreements. group public affairs division, Dr Kennie Obat-
Dangote Group is constructing the 650,000 eru was quoted by local media as saying that the
barrel per day (bpd) refinery in the Lekki free company was interested in acquiring stakes in six
trade zone (FTZ) near Lagos at an estimated private refineries.
total cost of $19.5bn. Edwin noted that mechan- He said that this was in line with a govern-
ical completion is expected this year ahead of mental policy directive which stipulates NNPC’s
commissioning in January 2022. mandatory participation in any privately-owned
He said: “They are seeking to have 20% refinery with a capacity exceeding 50,000 bpd in
minority stake in Dangote refinery as part of order to uphold its duty of safeguarding national
collaboration ... so that they can sell their crude.” energy security.
This could represent a combined equity invest- Obateru said that five of the six facilities are at
ment of $3.9bn in the refinery. However, Edwin the developmental stage with the Dangote facil-
added that the company is not seeking equity ity by far the largest.
shareholders, noting rather that it intends to According to data from the Department of
purchase crude from the market. Petroleum Resources (DPR), only the 150,000-
Meanwhile, Dangote has previously pro- bpd Bua Refinery & Petrochemical, the 100,000-
vided assurances that the refinery’s purchase of bpd Resource Petroleum & Petrochemicals
Nigerian crude would not have an impact on the International Inc. and 55,000-bpd Allegiance
country’s 1.6mn bpd mandatory export volume Energy and Power Ltd facilities in Akwa Ibom
allocated by OPEC. State, the 100,000-bpd Gasoline Associates
Once complete, the facility will be Africa’s International Ltd unit in Ogun State and Dan-
biggest refinery and the world’s largest sin- gote currently have active licences to establish or
gle-train unit. It is, therefore, unsurprising that approval to construct/relocate.™

P6 www. NEWSBASE .com Week 22 03•June•2021