01 Sep Dangote explains how NNPC will fund 20% stake in His Refinery
The President of the Dangote Group, Aliko Dangote, yesterday explained that while a third of the 20 per cent equity taken by the Nigerian National Petroleum Corporation (NNPC), worth $2.7 billion, would be paid in cash, the second would be through crude sales and the third would be through profits made by the corporation.
He spoke in a documentary on Arise News Channel, THISDAY’s broadcast arm. According to him, the deal also involves all the products to be churned out by the $19 billion facility, including petrochemicals.
He revealed that he got the inspiration to build the refinery from India, given what he described as the painful situation whereby Nigeria, a country of over 200 million people importing all petroleum products needed for consumption.
He pointed out that the project currently employs 29,000 Nigerians and 11, 000 foreigners with plans to ramp up the number to 57,000 in the coming months.
The 650,000 barrels per day refinery, located in Lagos is expected to start operation in the first half of next year, with the NNPC in the process of buying 20 per cent of the refinery.
Stressing that the refinery is capable of meeting the country’s entire petrol, diesel and jet fuel needs, Dangote said that as it stands, the country expends about 25 per cent of all its import bills on bringing in petrol products into the country.
He lamented that Nigeria lost between $50 billion to $60 in investments to the delayed passage of the Petroleum Industry Act (PIA), but explained that with the recent presidential assent, investors who had been sitting on the fence are now expected to move into the country.
On reasons for accepting NNPC’s 20 per cent equity, he explained that it wasn’t possible for the government to sit back when a massive project like the refinery is ongoing because of the need for energy security, assuring that in three or maximum four years, NNPC will recoup its investment.
“People keep talking about the refinery, they didn’t buy only the refinery, they bought refinery with petrochemicals. I could have actually decided to do like some of my mates here in Nigeria and just keep my money in the bank or keep the money abroad.
“But you know I’m very, very passionate about Nigeria and making Nigeria great. If it’s just Dangote group making money, I would have just kept that money and participate in capital markets abroad where my money is in dollars and I am making money, but no.
“We know as a country we have challenges, how do we address these issues. The only way for me is not to sit and be criticising, no, I should be part of the problem solvers and part of the change. My prayer is that I will give most of my wealth when I am alive,” he said.
Also, the Governor of the Central Bank of Nigeria (CBN) Mr. Godwin Emefiele, who spoke in the documentary explained that with the coming of the refinery, Nigeria would save a lot of its foreign exchange that’s currently being used in importing refined products.
He said: “Ordinarily, setting up a 650, 000 barrels per day refinery, is usually a project that is set up by sovereign countries, not by individuals, no matter how big you are, no matter how big the company is.
“Our own selfish interest is that this will help to achieve our import substitution objectives and on this, you’re talking about goods that are currently being imported into the country with scarce foreign exchange, that we will now begin to produce them locally, thereby saving foreign exchange that the central bank would have spent importing or funding the importation of these items.
“At every opportunity that I have visited that project site, I get encouraged and I seize the opportunity of those visits to encourage even other Nigerians or other businesses, whether local or foreign, that Nigeria has a lot of potential and as long as people can contemplate this kind of projects, they will receive the needed support from the CBN for the importation of plants and equipment.”
Sorry, the comment form is closed at this time.