The Nigerian National Petroleum Corporation (NNPC) has expressed interest in purchasing a 20 per cent minority equity stake in Dangote Refinery, Lagos, reputed to be Africa’s biggest oil refining facility and the world’s largest single-train plant.
The 650,000 barrels per day (bpd) integrated refinery, expected to process a variety of light and medium grades of crude, including petrol and diesel as well as jet fuel and polypropylene is owned by Nigeria’s Dangote Group and is worth about $15 billion.
It is designed to produce up to 50 million litres of petrol and 15 million litres of diesel a day, roughly 10.4 million tonnes of the product, 4.6 million tonnes of diesel, and 4 million tonnes of jet fuel per year, in addition to having a fertiliser plant, which will utilise the refinery by-products as raw materials.
NNPC Chief Operating Officer, Refining and Petrochemicals, Mr. Mustapha Yakubu, unfolded the investment plans yesterday at the end of a two-day Nigeria Oil and Gas Opportunity Fair (NOGOF), 2021, tagged: “Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil and Gas Industry.”
He spoke just as the Department of Petroleum Resources (DPR) has said it is targeting to generate and remit about N900 billion into the Federation Account in the second quarter of 2021.
Yakubu said discussions were already ongoing with the Dangote Group for the acquisition of the stake.
He stated during the virtual event that the collaboration will further ensure undisrupted product supply to Nigerians when the deal materialises.
He added that one of its divisions, the Greenfield Refining Projects Division (GRPD) was handling the negotiations.
He said: “We have what we call the green field refinery and the Greenfield Refining Projects Division (GRPD) of the NNPC. What we do, our strategy is to collaborate and seek strategic partnerships with private investors.
“At the moment, we have Dangote Refinery, which is the 650,000 capacity barrels per day plus a mini 80,000 tonnes per annum petrochemical plant.
“What are we doing there? I can tell you today that we are seeking to have a 20 per cent minority stake in Dangote Refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery.
“That’s 650,000 barrels, going into a single crude distillation unit (CDU).
When that comes on board, it will also wet the nation for us.”
According to him, the corporation is also interested in partnering with the African Refinery in Port Harcourt, a co-location facility, the CNCEC Chinese group, which is interested in building two refineries in Nigeria, the Waltersmith modular plant, in addition to collaborating with Azikel refineries on condensate production.
Yakubu stated that notwithstanding the global push for renewables, Nigeria has a local, domestic and regional market for hydrocarbons.
He added that Africa will continue to rely on fossil fuels at least in the next 20 years.
He said the country would not just fold its arms and do nothing with its hydrocarbons just because the International Energy Agency (IEA) has predicted a net-zero emissions scenario by 2050.
“Today, when you are bringing products into Nigeria, they disappear to neighbouring countries. There’s nowhere in countries around Nigeria that they sell fuel for less than N400 per litre. So, there’s a market,” he said.
On the country’s non-functional refineries, he said there was a deliberate effort to power the refineries down because of the need to do a full rehabilitation beyond the regular turnaround maintenance.
“We believe the only way to do that is to power them down to reduce some of the cost. We have heard that we are spending so much money on the refineries, yet they are idle.
“Of course, there are costs associated with idle refineries; we have staff salaries and remuneration and then the power plant utility operations. And also we need to maintain the plants in terms of preservation and lost investments because they are assets that we believe can be brought to life,” he said.
He stated that the NNPC was exiting the running of the country’s four refineries, and it has recently called for bids from competent and qualified contractors for that purpose.
Yakubu explained that NNPC was not in the best position to run the refineries and has opted for a new model, the Operation and Maintenance (O&M) for the running of the facilities.
He added that it is important to bring in O&M professionals, especially given the fact that as an engineer in the NNPC, no matter how competent, the employee must exit when they hit 60 years of age.
The COO said Expression of Interest (EoI) for organisations that would run the refineries was already out and many people had been evaluated.
He expressed optimism that the NNPC will choose the best contractors to handle the project.
According to him, it is becoming more difficult to get local lenders to finance fossil fuel businesses because of the renewable energy drive, adding that the NNPC is also looking for investors for the rehabilitation of its pipelines because they remain the best way to transport products from refineries to depots.
UAE makes U-turn, reinstates ban on Nigerian flights
Less that 48 hours after announcing resumption of flights to Nigeria, Emirates, the UAE flag carrier, has again announced indefinite suspension of flights to Nigeria.
The UAE authorities had initially fixed Wednesday, June 23, 2021, for resumption of flights to Nigeria.
But in a statement on its website on Monday, the airline said, “In line with government directives, passenger flights to and from Nigeria (Lagos and Abuja) are suspended with effect from 21 June 2021 until further notice.”
The airline had on Saturday announced resumption of flights, which were suspended in March over diplomatic row on COVID-19 protocols.
The Dubai’s Supreme Committee of Crisis and Disaster Management had lifted the ban on Nigeria and also removed the rapid antigen test and said passengers from Nigeria would only be required to possess negative PCR test.
“We look forward to facilitating travel from these countries and supporting various travelers’ categories.
“We will resume carrying passengers from South Africa, Nigeria and India in accordance with these protocols from 23rd June,” Emirates had announced.
But it made U-turn on Monday with a new travel update indicating that Lagos and Abuja flights would no longer resume on Wednesday as earlier announced.
Emirates said, “Customers travelling to and from Lagos and Abuja will not be accepted for travel. Customers who have been to or connected through Nigeria in the last 14 days are not permitted to board from any other point to the UAE.
“We regret the inconvenience caused, and affected customers should contact their booking agent or Emirates call centre for rebooking. Emirates remains committed to Nigeria, and we look forward to resuming passenger services when conditions allow.”
CAC boss denies N6.54bn fraud allegation
The Corporate Affairs Commission (CAC) has denied claims of alleged N6.542 billion fraud and other allegations by the Nigeria Labour Congress (NLC).
The Registrar General/Chief Executive, Corporate Affairs Commission (CAC), Alhaji Garba Abubakar, has expressed the commission’s commitment to the anti-corruption war of the President Muhammadu Buhari’s administration, adding that it will not in any way be party to corrupt practices.
He said the CAC would continue to work hard to achieve the objectives for which it was established to the satisfaction of its customers and stakeholders.
Abubakar spoke against the backdrop of alleged abuse of power and financial impropriety among others leveled against the management by the CAC staff union under the aegis of the Amalgamated Union of Public Corporation , Civil Service Technical and Recreational Services Employees (AUPCTRE).
He vowed that the commission would not be distracted by mischief makers bent on running down the organisation.
The commission in a statement said contrary to the claims by the union, the registrar-general had declared his assets before the Code of Conduct Bureau (CCB) in accordance with provisions of the laws of the land, pointing out that it was laughable that the claimants were raising doubt over the content of asset declaration they are not privy to. “It behooves on them to establish any case of wrong declaration,” it stated.
On the alleged inflation of consultancy fees for tax reconciliation, the commission in a statement issued over the weekend by the Director of Public Affairs, CAC, Duke Ukaga, said the tax consultant was engaged long before the appointment of Abubakar, adding that the former’s fees was based on the percentage of savings made to the commission as contained in his engagement letter.
The commission said the consultant was able to renegotiate the commission’s tax liability, saving about N600 million in the process.
The commission, among other things, denied accusations of abuse of power, financial impropriety and commercialisation of promotion examination in the commission.
According to it, “The 2019 examination was held on October 10, 2020, at JAMB CBT Centres in Abuja, Kano and Lagos. A total of 394 staff members sat for the 2019 promotion examination.
“The result of the examination was published the same day at the commission’s website upon receipt from JAMB.
“At the end of the final collation, a total of 258 candidates were successful and promotion letters were issued to the staff upon approval by the board of the commission. It is highly mischievous for anybody to claim that the process was commercialised.”
The management further clarified that the allegations are “figment of imagination of the AUPCTRE who could still not accept the reality of losing checkup dues of over N2 million monthly from the commission following the stoppage of checkup dues deduction in respect of senior staff.”
Nigeria’s economy recovering from COVID-19 impact – IMF
International Monetary Fund (IMF) has announced that Nigeria’s economy is gradually recovering from the negative impact of COVID-19.
This is as it cautioned the federal government to keep reliance on CBN overdrafts for deficit financing within legal limits.
The Fund also urged the government continue to make efforts to strengthen budget planning and public finance management practices to allow for flexible financing
The IMF, in a statement at the end of its virtual meetings with the Nigerian authorities to discuss recent economic, financial developments and outlook, described the recent removal of the official exchange rate from the Central Bank of Nigeria (CBN) website as “encouraging”.
IMF mission, however, noted that both unemployment and inflation rates remain elevated.
The mission said following the sharp output contractions in the second and third quarters, gross domestic product (GDP) turned positive in Q4 2020 and growth reached 0.5 per cent year-on-year in Q1 2021 — supported by agriculture and services sectors.
“Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 per cent, owing to high food price inflation,” the statement reads.
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