NNPCL’s Kyari denies allegations of sabotaging domestic refineries, clarifying that the corporation is focused on enhancing Nigeria’s oil and gas sector.
Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, has firmly stated that the company is not hindering the success of local refineries in Nigeria.
Kyari shared this information as he presented his vision for Nigeria’s energy future during the opening ceremony of the 42nd Annual International Conference and Exhibition hosted by the Nigeria Association of Petroleum Explorationists (NAPE) in Lagos on Monday. The event was themed: “Resolving the Nigerian Energy Trilemma: Energy Security, Sustainable Growth, and Affordability.”
The Group CEO of NNPC Limited clarified the situation following recent controversies involving oil marketers and the Dangote Refinery.
The Group Chief Executive Officer, who was the special guest of honor at Monday’s event, refuted claims that NNPC Ltd. is undermining the efforts of domestic refineries.
Kyari stated that NNPC Ltd. holds partial ownership of the Dangote Refinery, emphasizing that this investment is a strategic initiative designed to enhance domestic fuel supply.
In a recent interview with Bloomberg, Dangote disclosed that the NNPCL had initially planned to acquire a 20% stake in the refinery; however, this has now been decreased to 7.2%.
Dangote stated that the NNPC initially consented to a $2.79 billion agreement, which encompassed an upfront payment of $1 billion.
After renegotiating the terms, the corporation chose to decrease its equity share.
“They’ve made a significant error, yet that’s our current situation,” Dangote commented, highlighting that the agreement has been concluded with Dangote Group owning most of the refinery’s shares.
He mentioned that they had reached an agreement and offered a favorable deal. They structured the arrangement so that, as part of a $2.79 billion deal, the other party would initially pay them $1 billion approximately eighteen months ago. The remaining payment was to be divided into two parts:
The initial arrangement involved deducting $2 from the balance each time they supplied us with crude oil, approximately 300,000 barrels per delivery until the debt was fully repaid.
The remaining part would be taken from their profits.
” ‘The NNPC decided to withdraw from this arrangement. There seemed to be confusion or perhaps a misunderstanding on their part,’ Dangote remarked. ‘They no longer wished to continue with the crude deduction system and instead chose to settle the remaining balance in cash.'”
Providing an update on NNPCL’s relationship with local refineries, Kyari announced that the state oil company plans to partner with private refineries. This collaboration aims to ensure a sustainable and affordable supply of petroleum products while implementing Naira-for-crude transactions to help stabilize the local currency and regulate foreign exchange markets.
He noted that this will lead to the expansion of gas infrastructure, including projects like the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline and Obiafu-Obrikom-Oben (OB3) Gas Pipelines. Additionally, it will foster the development of cleaner energy alternatives such as Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG).
Kyari also mentioned that the NNPCL has ceased importing refined petroleum products and is currently sourcing fuel from the Dangote Petroleum Refinery as well as other local refineries.
“Currently, NNPC relies solely on domestic refineries and does not import any products,” he revealed.
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Remember that the NNPCL was initially the only off-taker of Dangote PMS until the Federal Government allowed other marketers to directly source from the refinery.
On Monday, the Independent Petroleum Marketers Association of Nigeria (IPMAN) announced that it has reached an agreement with Dangote Refinery to directly lift products.
The National President of IPMAN, Abubakar Garima, announced this following a meeting of the Association’s National Working Committee in Abuja.
He stated that the collaboration would guarantee a consistent and affordable availability of PMS products across the nation.
At the event, Kyari further mentioned that the company has finalized plans to soon deliver 12 Compressed Natural Gas (CNG) mother stations along with mini LNG plants. This initiative is part of their efforts to enhance the current supply of 1.6 billion standard cubic feet of gas for the domestic market.
Kyari stated that addressing the energy trilemma is a significant responsibility for us as caretakers of Nigeria’s energy future. NNPC Ltd. is diligently working to enhance our supply chain, develop new refining capabilities, and broaden our retail network.
The leader of NNPC Ltd. stated that the company is broadening its initiatives to improve domestic energy access, with major project launches expected in the next 3-6 months. These projects include CNG mother stations, mini-LNG plants, and more CNG daughter stations.
Kyari praised President Tinubu for his efforts to ease forex pressures by decreasing fuel imports and boosting Nigeria’s local refining capabilities. He highlighted the importance of collaboration, innovation, and technology in reaching the country’s energy objectives.
Addressing the energy trilemma demands innovative solutions, collaborative insights, and united effort. Let us work together to create a Nigeria where energy is stable, sustainable, and accessible for everyone.
Regarding NNPC Ltd.’s mandate to ensure energy security according to the Petroleum Industry Act, 2021, Kyari stated that the company has developed partnerships and investments focused on boosting local production and generating revenue for economic diversification.
