Dangote, Others Pull Out Of Kaduna, P-harcourt Refineries' Deal.

 :d :d :d

When buying a new refinery you pitch an average price of $1,000/bpd.

So basically, the Kaduna Refinery should cost no more than 100,000bpd x $1,000  which will be $100,000,000.


The China National Petroleum Corporation (CNPC) knew full well that they could build a brand new, more modern refinery with the same capacity for less. So why would anybody pay $160,000,000 for that old piece of scrap? Because of National Pride and warehouses full of spare parts? Well, Chinese don't have Nigerian National Pride and they come with their own spare parts.


Yet Nigerians a shouting foul play when Bluestar just overpaid $60,000,000 for a refinery that does nothing.

The Federal Government better make sure they don't go back on the deal because them don catch Dangote mugu. There's no professional  in the Petroleum industry worldwide that would pay $160,000,000 for a 100,000 bpd Refinery unless there's also a diamond mine somewhere below that complex.

Anyway, Bluestar would still make its money back fast considering that they'd be running a monopoly during their first 2 years of operation. So no need for tears. And no need for cold feet. A deal is a deal. No renegging.

No denex,

Nigerians are not claiming that they being scammed, they simply stated that Bluestar committed Blue murder! 

According the slain manager of the Kaduna refinary, the amount BS bought the refinenary is only equivalent to the cost the spare parts in the warehouse only.

The public hearing conducted by the House of Reps. revealed also that the consultants hired by BPE for the sale of the refinary did not visit the refinenary physically to value it. They valued the refinenary right in their office in Abuja.

Who is fooling who?

Wishy whishy wish!!

In a country of over 150 million people, they are certainly not the only wisemen around.

Dangote and Co. (Bluestar) were the highest bidders and thus won the rights to acquire the refineries!  The bid process was not private nor closed, any Tom, privates, Chika, Usman or Tunde could, and should have, put in a higher bid if they had the guts and the money.  Perceived instability (political, regional, religious etc) either real or imagined does not instill confidence in the business community both local and international.  $721m is a huge and risky commitment by any standard, and if Dangote and Co. were willing to take the risk, while non other(s) both local and international were willing to, they should be applauded.

It goes without saying that Dangote and Co. would have turned the refineries around, and have them operate at optimal capacity, thus making petroleum products more readily available and consequently bring down the price.

@youngies

Why don't you find out how much a 100,000 bpd refinery cost, let alone one which is not functional and you will realise why nobody wanted to buy the refineries years after they were put on the market.

Definitely, the Nigerian factor along with monopoly, 140 million customers and increase in fuel price will be enough for them to rake back their investments in one year. But foreign investors cannot understand this. So they can't see why they should buy these refineries at those prices, especially when they are not in working conditions.

Hmmmmmmm!  Were we "forward" before?

DON'T GIVE NNPC THOSE REFINERIES!! - Biodun Sonowo THE PUNCH

"THE Nigerian National Petroleum Corporation under its current head, Funsho Kupolokun, has publicly shown its true hue. At a Senate public hearing in Abuja last week, the state-owned oil conglomerate and its regulatory arm, the Department of Petroleum Resources, reversed themselves on a keystone of official policy. The reversal was all the more remarkable in view of the stridency of Kupolokun’s long-standing advocacy of deregulation and privatisation in the downstream sector of the oil and gas industry.

According to the new gospel coming from the NNPC, the hasty sale of the Port Harcourt and Kaduna refineries should be cancelled. This proposition enjoys widespread support among many Nigerians who are understandably angry with the head of a committee that collected millions of naira from the government to undertake a nationwide tour to ‘sensitise’ Nigerians to the imperative of the official version of liberalisation.

As repeatedly enunciated by Kupolokun, pump prices of refined petroleum products must be dictated by ‘market forces’ and reflect the price of crude oil in the international market. To ensure the affordability of the products, the importation of refined products would be thrown open to all those who had the wherewithal to do so as long as they met the specifications.To make importation attractive for these importers, prices were to be adjusted upwards on the assumption of higher domestic pump prices and guranteed profits. This would encourage them to venture into products importation in the first place.

In the meantime, the government would immediately halt the wasteful expenditure on turnaround maintenance of the refineries and indeed, sell majority equity in them to reputable core investors. Licences would also be issued to interested private sector operators to establish their own refineries.

It was this gospel that the current Group Managing Director of the NNPC articulated and preached everywhere. His position had weight as he was viewed by many as having the former president’s ear in addition to being a member of the presidential economic team. Some will recall how the oil sector executive, shortly before he replaced Jackson Gaius Obaseki as GMD, insisted that government would not spend a kobo more on TAM on the refineries as it was determined to exit the management of refineries completely and rightly allow the private sector to do the job.

Many ordinary Nigerians did not notice this, but once he assumed the driver’s seat at the NNPC headquarters, Abuja, the man was no longer desperate to get government and the oil giant out of the downstream sector. On the contrary, hundreds of millions of dollars have been spent on maintaining the refineries that, like 40-year-old vehicles, hardly operate at 40 per cent of their installed capacity and often, not at all. Besides, the firm under his watch, is still building mega stations to deepen its venture into retailing.

The well-rehearsed performances of the NNPC’s Abubakar Yar’Adua and the DPR Director, Tony Chukwueke at the Senate hearing on the June workers’ strike, reflect the character of advisers who work for successive regimes.

Yar’Adua, on behalf of the NNPC, shifted the blame for the current state of the refineries to the past government by saying a plan by the NNPC to repair them was halted in favour of the government’s preference for selling them. He insisted that the oil firm had the capacity to efficiently run the refineries but was hamstrung by the Obasanjo presidency, which he accused of creating ‘bottlenecks.’ Chukwueke waded in by citing some countries that ran stateowned refineries profitably to back his call for the NNPC’s retention of the privatised refineries.

Their arguments are self-serving and cynical. It is surprising that people who either actively supported the ruinous policies of the last government in the sector, or kept silent and retained their jobs could now disown the regime perhaps to ingratiate themselves with the new occupant of State House.

True, the sale of the Kaduna and Port Harcourt refineries was opaque and fell short of due process, the NNPC apparatchiks should not be allowed to sink their claws into them, ever. Waste, corruption and inefficiency had reigned and hampered the growth of the economy. Under the NNPC, the refineries can never be run efficiently on account of entrenched corruption and its perpetuation by political office-holders who cannot keep their greedy hands away from the millions of dollars required to keep them functioning.

There is no alternative to privatisation in a country like Nigeria where corruption dictates public policy. In countries like China and Saudi Arabia, thieves can be executed when caught. In Nigeria, thieves of the magnitude created by access to public funds hold high offices and are celebrated.

But the biggest lesson from the NNPC’s lunge for the retention of the refineries it had run aground is for President Umaru Yar’Adua. In full public glare, some of those who misadvised and supported his predecessor are distancing themselves from his failures and for reasons that do not necessarily approximate to the advancement of the general economic interests of the commonwealth.

In taking decisions on the problems created for him by Obasanjo, he should realise that the buck stops with him and that as president, he will have many advisers and ‘supporters’ but what will speak for him at the end of his term are those things that will move the economy to a higher level and benefit the greatest number of the populace.

One place to start is to deny the NNPC the opportunity to further torment Nigerians by retaining any refinery at all.

In the same vein, he should reverse or renegotiate the sale of the two which Obasanjo sold with a view to getting them into the hands of capable private operators at a favourable price to the taxpayer who has suffered so much in the hands of plunderers."

http://www.e-punch.com/Default.aspx?selpg=238&selDt=07/18/2007&BMode=100

smart guys these dude will be importing oil with his friends and be sabotaging the national refineries at the same time
market forces: 

this Guy

there is no importer of Crude oil that wants to sabotage refineries. If the refineries are fixed and are producing at capacity, the importers will become marketers and distributors. When more refineries come in, the importers will become exporters to neighbouring countries.
THERE IS NO NEED FOR IMPORTERS TO SABOTAGE! 

I couldn't agree more with those in support of selling off these wastes. When will people in Nigeria ever realize that the govt has no place in running businesses. Na wa oh! Those refineries have been dead for some time now meanwhile they've been doing so called TAM's (Turn Around Maintenance) every now and then and in the process siphoning billions of dollars yet they are producing next to nothing. Those refineries were actually offered to Multi-National Co's and they all refused to touch them with light pole yet a NIGERIAN tries to buy and fix them and all the hoopla. People get serious mental problem for that country and they're really slowing down the potential of that Nigeria. Very sad.

They should go and build their own refineries and compete with government.

It's music 2 my ears. Why shld we give Dangote our refineries in addition 2 having given 2 sole importer of our rice, sugar, flour, cement, oh least I forget he actually owns a suager refinery so a refinery is arefinery whether its a suagr refinery or an oil refinery.

@angel101

No mind me jare. I was mistranslating the 80% shares of Dangote and Otedola in Bluestar.

How come in other countries, government-owned businesses thrive?


 https://www.fundinguniverse.com/company-histories/The-British-Petroleum-Company-plc-Company-History.html

http://www.aliciapatterson.org/APF001975/Crowe/Crowe02/Crowe02.html