- Oil rises to $65 as market awaits Fed
Ejiofor Alike in Lagos and Kasim Sumaina in Abuja
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, on Wednesday declared that the national oil company was not in contest for market share with the forthcoming Dangote Refinery but rather providing support to the promoters of the project to boost in-country refining capacity.
This is coming as crude oil prices rose for a fifth day to over $65 per barrel yesterday, supported by a drop in US inventories and investor expectations that the United States Federal Reserve will lower borrowing costs for the first time since the financial crisis more than a decade ago.
Speaking while receiving the President and Chief Executive Officer of the Dangote Group, Alhaji Aliko Dangote, at the NNPC Towers, Kyari explained that as the chief enabler of the Nigerian economy, the NNPC had a duty to rally industry players like Dangote Group to achieve the long-held target of making Nigeria a net exporter of petroleum products.
The NNPC GMD assured that the same level of support would be provided to other promoters of refineries, noting that the ultimate goal was to enhance in-country production to the point of self-sufficiency and ultimately for export.
Earlier in his presentation, Dangote emphasised that the business approach of the Dangote Refinery was to see NNPC as a collaborator rather than a competitor, noting that the refinery would rely heavily on the Corporation’s invaluable knowledge of the refining business in Nigeria to achieve its central objective.
Dangote aligned his company with the federal government’s aspiration to ensure adequate in-country refining capacity, stating that upon completion the refinery would dedicate 53 per cent of its projected 650,000 barrels per day refining capacity to the production of petrol.
“The most important thing for us is to see how we can partner with NNPC, it is not to see how we can compete with NNPC. We would like NNPC to be part of us and we also want to be part of NNPC. I think that is the only way we can achieve a win-win situation,” he said.
Meanwhile, crude oil prices rose for a fifth day yesterday, supported by a drop in US inventories and investor expectations that the US Federal Reserve will lower borrowing costs for the first time since the financial crisis more than a decade ago.
Brent crude oil, the international benchmark for oil prices, was up 40 cents, or 0.6 per cent, at $65.12 a barrel, while the US West Texas Intermediate crude CLc1 gained 20 cents, or 0.3 per cent, to $58.25 a barrel.
Central bankers in the US began their two-day meeting on Tuesday and were expected to cut interest rates, with President Donald Trump, reiterating his call for the Fed to make a large cut.
Oil stockpiles fell again last week, along with petrol and distillate inventories, data from the American Petroleum Institute industry group showed on Tuesday.