The Nigerian National Petroleum Corporation(NNPC) has explained the basis of investing in Dangote Refinery. I must confess that the argument is very weak. Yes, the government believes that investing in the refinery will force Dangote Refinery to buy Nigerian crude even if there are alternatives in other markets.
The GMD of NNPC, Mele Kyari, noted the “decision to buy the 20 per cent stake in the Dangote refinery was to ensure the plant buys crude from Nigeria….He explained that the 20 per cent stake valued at $2.6 billion is tied to the refinery buying crude oil from Nigeria, adding that without the equity, Dangote refinery could buy cheap crude from Venezuela and import it to the country.”
I am not sure a country should make a decision that way when you have four idle refineries. Since the national refineries are not running, all we need to do is to get them running, and if we do that, the issue of Dangote Refinery capacity will not matter. By making a decision to invest to have demand, we are saying that the national refineries are forever gone!
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Mr Kyari before the House of Representatives Committee on Finance at the interactive session on the Medium Term Expenditure Framework (MTEF):
“He (Dangote) has the right to buy oil from anywhere. So you can’t force him to buy. We structured our equity participation that this refinery must buy at least 300,000 crude from us. This guarantees your market,” Mr Kyari said.
“This refinery is a very complex refinery, complex in our industry because it can crack any crude. So, it can buy any cheap crude from anywhere, and bring it into this country and leave you to your crude.
“We simply saw this opportunity, we said are not going to take any government money to put into this. We are borrowing money from the AfriExim consortium to pay for our initial payment and also tied his subsequent payment to him buying from our production.”
“Our decision to take equity in the Dangote refinery was a very calculated and conscious decision. First, there is no resource-dependent country like ours anywhere and with a national oil company will have a venture of this size and magnitude with its very clear security implications that is situated in a free trade zone. Literally, this refinery is not in this country.”
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Well first picture are coming on this before you’re witch hunters hit hard saying your celebrated them days ago with speaking on there flaws.
That said, this is senseless.
Do not worry about that. I report and analyses news. If you do well, I point out. If you mess out, I do. That is what objectivity means.
That great of you.
Just saw my *typos. Thank God you get my message. Happy sunday.
You do have many typos. That may be the reason you have issues with LinkedIn. Try to proofread before you hit SUBMIT. You need to have that discipline. You have to many typos!!
Thank you for the feedback.