This is a big revelation in the Nigerian business climate. Yes, the Nigerian government through NNPC, the national oil corporation, is planning to acquire 20% of equity in Dangote Refinery: “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.” So, magically, the Nigerian people have essentially solved any risk within Dangote Refinery as the world begins to move post-hydrocarbons. Depending on valuation, who knows, the company can even make “profit” before the first day of refining crude.
What do I mean? If Dangote Refinery invested $10 billion in that refinery, and now values the business at $50 billion and Nigeria takes 20% stake, it simply means that Dangote Refinery has recovered the $10 billion. Magically, it does not need to spend years paying back debtors, etc, as it can return the money immediately!
NNPC Chief Operating Officer, Refining and Petrochemicals, Mr Mustapha Yakubu, at the virtual event, stated that one of its divisions, the Greenfield Refining Projects Division (GRPD) was handling the negotiations with Dangote Refinery.
He said: “We have what we call the Greenfield 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 barrels per day capacity, 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.”
But how would Nigeria get the money to pay the refiner? We have a new revenue source called Recovered Loot: “The Minister of Finance and National Planning, Zainab Ahmed has revealed that the government has been borrowing from recovered loots to fund the budget. The minister also revealed that the government has not been able to repay back the loans taken so far. She revealed this while appearing before the House of Representatives committee investigation recovered loots on Thursday.”
Because more recovered loots are coming back, we are sure that resources would be available to buy this 20% stake, even as Nigeria continues to look for funds to fix its own refineries! What a country!---
Click to join Tekedia Capital Syndicate and build Next Africa with a minimum of $10,000 co-investment in startups.