Nigerian economy could see serious boost from NNPC stake in Dangote Oil Refinery

The Nigerian National Petroleum Corporation’s (NNPC) recent proposal to acquire a 20-percent stake in the much anticipated Dangote Oil Refinery could significantly boost Nigeria’s economy.

The country could earn up to $11 billion per annum from the project.

The NNPC proposal was welcomed by the management board of Dangote Industries Limited, which owns the refinery, and aligns with legislation that mandates the NNPC’s participation in any privately owned refinery producing more than 500,000 barrels per day.

The Dangote Oil Refinery is a 650,000-barrel-per-day integrated refinery and petrochemical project under construction in the Lekki Free Zone near Lagos. It also has a fertilizer plant, which launched at the end of Q1 2020 and has commenced production.

Once the refinery officially launches, the naira is expected to appreciate. The economy would open up as the project would create employment opportunities along the value chain, unlocking a significant crude oil market and making Nigeria a substantial exporter of refined products.

In a recent statement, Dangote Industries Limited Group Executive Director, Strategy, Capital Projects Devakumar Edwin said the newly launched $2.5-billion fertilizer plant could produce enough for local consumption.

Nairametrics reported the executive as saying that Nigeria’s demand for fertilizer is less than 1 million tonnes, while its capacity is 3 million tonnes. The plant can quickly meet local demand and also produce fertilizer for export to other West African countries.

“We have the capacity to turn out 4,500 tonnes of urea every day. This is a bulk application fertilizer that each crop in Nigeria or globally requires because of the nitrogen content; this is a rich fertilizer having 46 percent nitrogen,” Edwin said.

News that the NNPC could acquire a 20-percent minority stake in the Dangote Oil Refinery was mentioned by an official in May at the 2021 Nigeria Oil and Gas Opportunity Fair themed, “Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil and Gas Industry.”

Earlier, Nairametrics reported NNPC Chief Operating Officer, Refining and Petrochemicals Mustapha Yakubu as the official who announced the potential acquisition during a speech at the fair.