FG ENCOURAGES NNPC TO INVEST IN PRIVATE REFINERIES, SHIFTS FOCUS FROM GOVERNMENT-OWNED ONES
Detailed Breakdown:
1. Context: The Minister of State for Petroleum Resources, Heineken Lokpobiri, has advised the Nigerian National Petroleum Company Limited (NNPC) to focus on acquiring equity stakes in private refineries rather than running government-owned refineries.
2. NNPC’s Role in Private Refineries: Lokpobiri highlighted that the NNPC should invest in upcoming and already established private refineries to improve performance. This would involve adopting a different operational model for the existing four government-owned refineries.
3. Background on NNPC’s Investments: He referenced the NNPC’s reduced stake in the Dangote refinery from an initially planned 20% to 7.2%. Furthermore, the NNPC has spent approximately $4 billion on rehabilitating the Port Harcourt refinery, with little progress.
4. Government’s New Strategy: The Nigerian government recently advertised to transfer management of the government refineries to private operators for more effective operations. This shift is seen as a strategic move to ensure optimal refinery performance.
5. Key Quote: “We will encourage NNPC Ltd to run the four governmental refineries on a different model… and to take equity with upcoming private refineries.”
This new focus on public-private partnerships is aimed at increasing Nigeria's refining capacity while reducing reliance on government-operated facilities.
Detailed Breakdown:
1. Context: The Minister of State for Petroleum Resources, Heineken Lokpobiri, has advised the Nigerian National Petroleum Company Limited (NNPC) to focus on acquiring equity stakes in private refineries rather than running government-owned refineries.
2. NNPC’s Role in Private Refineries: Lokpobiri highlighted that the NNPC should invest in upcoming and already established private refineries to improve performance. This would involve adopting a different operational model for the existing four government-owned refineries.
3. Background on NNPC’s Investments: He referenced the NNPC’s reduced stake in the Dangote refinery from an initially planned 20% to 7.2%. Furthermore, the NNPC has spent approximately $4 billion on rehabilitating the Port Harcourt refinery, with little progress.
4. Government’s New Strategy: The Nigerian government recently advertised to transfer management of the government refineries to private operators for more effective operations. This shift is seen as a strategic move to ensure optimal refinery performance.
5. Key Quote: “We will encourage NNPC Ltd to run the four governmental refineries on a different model… and to take equity with upcoming private refineries.”
This new focus on public-private partnerships is aimed at increasing Nigeria's refining capacity while reducing reliance on government-operated facilities.