The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari, has affirmed that the company is committed to supporting the success of local refineries, not hindering their prosperity.
Kyari shared this commitment while presenting his vision for Nigeria’s energy future at the opening of the 42nd Annual International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE), held in Lagos on Monday. The event’s theme was “Resolving the Nigeria Energy Trilemma: Energy Security, Sustainable Growth, and Affordability.”
The NNPCL’s GCEO’s clarification comes in the wake of recent controversies between oil marketers and the Dangote Refinery.
However, the GCEO, who was the special Guest of honour at Monday’s event, debunked claims that NNPC Ltd. is sabotaging the efforts of domestic refineries.
Kyari said the NNPC Ltd. is part-owners of the Dangote Refinery, stressing that such an investment is a strategic move aimed at strengthening domestic fuel supply.
In a recent interview with Bloomberg, Dangote revealed that the NNPCL was originally meant to take a 20% stake in the refinery, but that has now been reduced to 7.2%.
According to Dangote, the NNPC had initially agreed to a deal worth $2.79 billion, which included an upfront payment of $1 billion.
However, after renegotiating the terms, the corporation decided to reduce its equity share.
“They’ve made a big mistake, but that’s where we are now,” Dangote remarked, emphasising that the agreement is now finalised, with Dangote Group holding the majority of the refinery’s shares.
He said, “We agreed with them and we gave them a good deal. Well, we structured an agreement. The first agreement was that they would pay us $1 billion as part of a deal worth about $2.79 billion. They paid that $1 billion roughly a year and a half ago. The balance of the payment was to be split into two portions:
“The first portion is every time they supplied us with crude (around 300,000 barrels), we would deduct $2 from the balance until the debt was paid off.
“The other portion would come out of their profits.
“However, the NNPC opted out of this structure. They got confused, or maybe there was some misunderstanding. They no longer wanted the crude deduction arrangement and preferred to pay the remaining balance in cash,” Dangote said.
However, giving an update on NNPCL’s relationship with local refineries, Kyari said the state oil company is set to collaborate with private refineries to ensure affordable and sustainable petroleum products supply; and Naira-for-crude transactions in order to stabilise the local currency and regulate forex markets.
This, he added, will bring about an expansion of gas infrastructure such as the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline and the Obiafu-Obrikom-Oben (OB3) Gas Pipelines projects and the development of cleaner energy options, such as Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG).
Kyari also said that the NNPCL has stopped importing refined petroleum product,s and is now off-taking fuel from the Dangote Petroleum Refinery and other local refineries.
“Today, NNPC does not import any product, we are taking only from domestic refineries,” he revealed.
Recall that the NNPCL was the sole off-taker of Dangote PMS until the Federal Government permitted other marketers to approach the refinery for direct lifting.
This is as the Independent Petroleum Marketers Association of Nigeria (IPMAN) on Monday, said it has secured an agreement with Dangote Refinery to lift products directly.
IPMAN National President, Abubakar Garima, announced this in Abuja after a meeting of the National Working Committee of the Association.
He said the partnership will ensure a steady and affordable supply of PMS products nationwide.
Speaking further at the event, Kyari also said the company has perfected plans to deliver 12 Compressed Natural Gas (CNG) mother stations and mini LNG plants soon, as part of efforts to boost the existing 1.6 billion standard cubic feet of gas supply for the domestic market.
“The energy trilemma is a profound responsibility we shoulder as stewards of Nigeria’s energy future. NNPC Ltd. is working tirelessly to improve our supply chain, develop new refining capacities and expand our retail network,” Kyari stated.
Highlighting the company’s commitment to improving domestic energy access, NNPC Ltd. CEO Mele Kyari announced that the coming 3-6 months would feature major project rollouts, including CNG mother stations, mini-LNG plants, and additional CNG daughter stations.
Kyari also praised President Tinubu’s efforts to ease forex pressures by curbing fuel imports and bolstering Nigeria’s local refining capacity. He stressed the importance of collaboration, innovation, and technology as essential drivers in meeting Nigeria’s energy objectives.
“Resolving the energy trilemma requires bold ideas, shared knowledge, and collective determination. Together, let us build a Nigeria where energy is secure, sustainable, and affordable for all.”
Regarding NNPC Ltd.’s mandate to ensure energy security, as outlined in the Petroleum Industry Act of 2021, Kyari explained that the company has actively cultivated partnerships and attracted investments to boost local production and generate revenue to support economic diversification.