The Nigerian National Petroleum Company (NNPC) Limited has provided clarification regarding the reduction of its stake in the Dangote Petroleum Refinery, confirming that its interest was scaled down from an initial 20% to 7.2%.
This decision, according to NNPC’s spokesperson Femi Soneye, was motivated by the company’s strategic shift towards investing in compressed natural gas (CNG) as a cleaner, more cost-effective energy source.
The initial acquisition of the 20% stake in the Dangote Refinery was a significant move by NNPC in September 2021, costing the company $2.76 billion. However, on July 14, 2024, Africa’s richest man and owner of the refinery, Aliko Dangote, announced the reduction of NNPC’s stake to 7.2%. This downsizing was not solely a financial maneuver; it was also tied to NNPC’s inability to meet its crude oil supply obligations to the refinery, a commitment that was integral to maintaining its 20% equity in the project.
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Soneye, while speaking on the Brekete Family program, elaborated on the rationale behind the shift.
“The reason for reducing our stake in Dangote refinery is because we wanted to invest in CNG. We observed that CNG is very cheap and all over the world, people are investing in clean and cheaper alternative energy,” he said.
He pointed out that CNG is not only an environmentally friendly option but also a cost-effective one for Nigerians.
“If Nigerians use CNG, it will be cost-effective for them. That is why the NNPC is building different CNG stations everywhere. We understand that with N10,000, Nigerians can fill their cars and use it for two weeks,” Soneye explained.
He indicated that the NNPC’s decision to invest heavily in CNG aligns with its broader strategic objectives, particularly in light of the challenges in fulfilling its crude oil supply obligations to the Dangote Refinery. The shift towards CNG is seen as a more viable and sustainable option, given the current state of Nigeria’s energy sector.
Regarding the ongoing speculation and allegations of sabotage surrounding the Dangote Refinery, Soneye was quick to dismiss such claims. Soneye assured that the NNPC remains committed to the success of the refinery, stating, “We want all Nigerians to know that the NNPC does not have any issue with the Dangote Refinery. We are part of the owners of the Dangote refinery, and we don’t want it to collapse.”
He emphasized that the investment of billions of naira by NNPC into the refinery reflects its vested interest in the project’s success.
“As of today, we have a 7.2 percent stake in the refinery. So, why would we want to sabotage such a company?” Soneye questioned.
The NNPC spokesperson also addressed the perceived dispute between the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Dangote Refinery. He clarified that the Petroleum Industry Act (PIA) does not grant NNPC the authority to halt operations at the Dangote Refinery.
“Mr. Farouk Ahmed is the head of Nigeria’s midstream and downstream petroleum regulatory authorities. They have power over all refineries. Anything that has to do with the distribution of petrol, they are in charge. In fact, they are superior to the NNPC in that sector. We don’t have anything to do with them,” Soneye clarified, distancing NNPC from the regulatory tussle.
The tension between NMDPRA and Dangote Refinery escalated on July 18, when Farouk Ahmed, the CEO of NMDPRA, criticized the quality of products from local refineries, including Dangote’s, comparing them unfavorably to imported ones. Ahmed also claimed that Dangote had requested a suspension of all petroleum product importation, directing oil marketers to source their supplies from his refinery. Dangote, however, denied these allegations, further fueling the ongoing controversy.
However, Soneye’s claim that the reduction in NNPC’s stake in Dangote’s Refinery is due to the decision to shift towards CNG investment, has been laughed at by many, especially energy experts who had earlier decried the NNPC’s inability to fulfill its crude oil obligation to the refinery.
The plan is clear: do all you can to ensure that the Dangote Refinery never succeeds. But it’s not just about Dangote, rather it’s about ensuring that nothing works. The same NNPC telling you that it’s shifting to CNG is also promising you Portharcout Refinery, how do you reconcile both? At what point did NNPC that told us that the reason for staking 20% in Dangote Refinery was to guarantee national security realized that the security is no longer tied to the refinery? There are lots of illogical and unintelligent things that pass with ease in this country, just because nobody is ever held accountable.
The CNG your NNPC is now promising you as the next best thing will be supplied by who? Who will lose job if your N10000 worth of CNG doesn’t carry you for two weeks? People yammer any nonsense here and still get paid at the end of the month, without ever accounting for anything. The rot is dizzying.
The people we appoint to juicy and lofty offices, what mandate are they given and what KPI? You cannot make notable progress if all you do is hire and pay people, without defining what performance is and what lack of results entails. The joke is on anyone who takes any of these funny creatures seriously. It’s as bad as it can get.
Fire the NNPC board from top to bottom . Carry out an overhaul audits (using Indians & Chinese) in its department regulators, and Agencies . Summon the Minister of Petroleum, Finance minister and the accountant general of the federation – do a forensic audit on them . Prosecute all malicious ranking cartels, EFCC/FBI (outsource) profiling of their foreign stakes abroad . “Take out” ??? Using a black ops .