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Nigeria needs a framework for energy security
- NNPC plans to invest a 20% equity in the Dangote refinery
- To recoup its investment in five years if negotiation is successful
Nigeria needs to develop a framework for energy security, says the Group Managing Director, Nigerian National Petroleum Corporation (NNPC) Mele Kyari. Kyari made this known on the Good Morning Show on Arise News Channel. He stated that Nigeria needs to prepare for a future without fossils, given the global push for the energy transition.
Kyari stated that Nigeria needs to diversify its energy sources given our dependency on petroleum imports for economic growth. ”For example, when there is a minor scarcity of petrol, it affects several things and several people because of our large population size and shortage in the supply chain of petroleum products. So there is a need to secure our sources of petrol supply at all times, which calls for the need to develop a framework where energy security is guaranteed”, Kyari said.
He also stated that the NNPC, in pursuit of energy security, plans to invest in a 20% stake in Dangote Refinery, worth about $3.8 billion. ”Three years ago, NNPC decided that it needed to expand its portfolio as a company, and spread its risks since it can’t depend on the refineries owned solely by NNPC. There was a need to spread the location of the refineries, the ownership of the refineries in such a way that at any point in time, the government can guarantee energy security for our country, and have multiple sources of supply”, Kyari stated. ”We decided that we are taking equity in many other assets. Today, NNPC has equity in ammonia plants, methanol plants and fertiliser plants so that we can spread our risks and portfolio and particularly in terms of petroleum. NNPC believes that taking equity in any refinery that is producing more than 100,000 barrels of petrol per day is the right thing to do”, Kyari added.
Kyari further acknowledged the challenges affecting the operations of government-owned refineries; he stated that the government is working hard to fix the refineries and will deploy a new strategy in tackling these challenges.