The planned acquisition of equity stakeholding in Dangote Oil Refining Company (DORC) is part of the strategy by the Nigerian National Petroleum Corporation (NNPC) to expand its business portfolios, its Group Managing Director, Mele Kyari, said.
Kyari who spoke on the issue while appearing on a TV Breakfast programme in Abuja said apart from guaranteeing energy security for Nigeria, the plan was also consistent with the corporation’s strategy to invest in other ventures in the oil and gas industry, such as petrochemicals and fertilizer plants.
“As a matter of strategy, we know we have to expand our portfolios. We have to take equity in very many assets. Today, we have equity in a number of other smaller assets and businesses in fertilizer and methanol plants. We know that doing this is a good business for NNPC and it will improve our balance sheet,” Kyari said.
The equity acquisition in the Dangote Refinery, he explained, was not a done deal yet, contrary to insinuations in the public space, as NNPC would still need to secure the approval of the Executive Council of the Federation (FEC) to conclude the plan.
“There are international processes for evaluating assets. We in NNPC are not an exception as no bank will give you loan without following the laid down processes. We are not going to take a kobo of government money to buy this equity. We are going to borrow on the back of the dividends that will come from the Dangote refinery,” Kyari added.
He said NNPC was vigorously pursuing the rehabilitation of its existing refineries in Port Harcourt, Warri and Kaduna, besides plans to acquire equity in several other business portfolios, including five other private refineries – modular and condensate refineries in Edo, Delta, Rivers and Akwa Ibom States.
On insinuations about fraudulent motives in the proposed equity acquisition in the Dangote Refinery, the Chief Operating Officer, Refining and Petrochemicals, NNPC, Mustapha Yakubu, said there was no iota of truth in media reports alleging there were some underhand dealings in the plan.
“The planned investment in DORC is one out of many other planned investments in domestic refining capacity, including the development of crude oil modular and condensate refineries near crude sources to curb pipeline vandalism,” Yakubu said.
Urging members of the public to disregard such reports, he said they were obviously designed to scuttle the Federal Government’s energy security agenda for the nation.
On the passage of the Petroleum Industry Bill (PIB) by the National Assembly, the NNPC GMD described it as a significant step in the over 12-year legislative journey of the PIB to becoming law in Nigeria.
The harmonized draft legislation would still be sent to the President for final assent before it becomes a valid law of the land.
One of the provisions that would need to be harmonized is that of the contribution of oil firms to the Host Community Development Fund which became contentious shortly before the passage of the Bill was approved by the Senate on Thursday.
While the House of Representatives approved five percent of the annual profit made by oil firms to be contributed to Host Community Trust Fund for the development of the oil communities, the Senate sliced the figure to three percent, resulting in disagreements among stakeholders.
Also, the Bill approved 30 percent of profits accruing from oil and gas operations by the NNPC to be set aside for exploration of oil in the country’s frontier basins.
The proposed law also stipulates that all exploration activities in the frontier basins would fall under the purview of the Upstream Regulatory Commission.
Speaker of the House of Representatives, Femi Gbajabiamila, hailed the lawmakers for the passage of the controversial bill, describing it as a significant achievement for the House and Nigeria.
Also, Minister of Petroleum Resources, Timipre Sylva applauded the ninth National Assembly for passing the PIB, saying it would be a game-changer for the nation’s Oil and Gas Industry.
On his part, the Group Managing Director of the NNPC, Mele Kyari, said the PIB would provide a win-win scenario for the host communities, investors and operators in the nation’s Oil and Gas Industry.
The PIB is a ‘Bill for an Act to Provide Legal, Governance, Regulatory and Fiscal Framework for the Nigerian Petroleum Industry, the Development of Host Communities; and for Related Matters.
It started its journey when the Oil and Gas Implementation Committee (OGIC) which was set up by President Olusegun Obasanjo administration in 2000 was mandated to draft a bill to reform the industry.
The PIB has been a constant piece of legislation in the National Assembly since 2008 till it was passed on July 1. (NAN)
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