The Nigerian National Petroleum Corporation (NNPC) Limited and Dangote Refinery are negotiating a new crude supply model that would involve purchasing crude oil in naira rather than in dollars.
As part of this agreement, NNPC has requested permanent office space at the Dangote Refinery to manage operations related to the crude supply deal. Under the proposed model, NNPC will oversee the production of Premium Motor Spirit (PMS), also known as petrol, supply the crude, and buy back the refined products in naira.
NNPC SEEKS OFFICE SPACE AT DANGOTE REFINERY
Devakumar V. G. Edwin, Vice President of Oil & Gas at Dangote Group, confirmed that NNPC intends to station a team of six to ten employees at the refinery for this purpose. Edwin stated, “NNPC has informed us that they intend to permanently station a team of 6 to 10 people at our refinery. They’ve asked us to provide office space for them since they will be supplying the crude, overseeing production, and buying back the products in naira.”
NEW CRUDE SUPPLY MODEL UNDER DISCUSSION
The new crude supply model being discussed aims to reduce Nigeria’s dependence on foreign currency. Details such as crude pricing and the naira exchange rate are still under negotiation.
Edwin also mentioned that Aliko Dangote, Chairman of Dangote Group, has agreed to the proposal despite the associated financial risks. Edwin quoted Dangote as saying, “Dangote said we are going to accept this because the country desperately needs foreign exchange. I am willing to take this loss in the interest of the country. I don’t mind.”
SIGNIFICANT SHIFT IN CRUDE SUPPLY AND REFINING
These discussions represent a significant shift in Nigeria’s approach to crude supply and refining, as both NNPC and Dangote Refinery explore ways to address foreign exchange concerns and support the country’s economic needs.