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Nigeria’s Federal Executive Council has approved $2.76 billion for the Nigerian National Petroleum Corporation (NNPC) to acquire a 20-percent minority stake in the soon-to-launch Dangote Refinery.
Minister of State for Petroleum Resources Timipre Sylva made the announcement on Aug. 4 in Abuja, The Cable reported.
Aside from the Dangote refinery, the government is also moving to acquire stakes in other private refineries. This aligns with legislation mandating the NNPC’s participation in any privately owned refinery producing over 500,000 barrels per day in Nigeria.
“Acquiring stakes in Dangote Refinery and other private refineries was a strategic decision by the government to get involved in the running of these important assets and not allow them completely in the hands of private individuals,” Sylva said.
Instead of using the government’s budget to acquire the 20-percent stake, the NNPC will borrow the funds to yield results and dividends for Nigeria. The NNPC stated that it is already discussing a loan with the African Export-Import Bank to acquire the stake.
The Dangote Oil Refinery is a 650,000-barrels-per-day integrated refinery and petrochemical project under construction in the Lekki Free Trade Zone in Lagos, Nigeria. The mega-facility is privately held by Nigerian billionaire and Africa’s wealthiest man Aliko Dangote.
In May, the NNPC stated its interest in acquiring a 20-percent stake in the refinery. It will be Africa’s most extensive oil-refining facility and the world’s biggest single-train facility when completed.
Moreover, the country’s currency is expected to appreciate once the Dangote Refinery commences operations.
