A viral WhatsApp message claimed HollyFrontier bought a 678,000 bpd refinery bigger than Dangote refinery for US$ 2.6 billion, while NNPC is buying 20 percent of Dangote refinery with a potential capacity of 650,000 bpd for US$2.7billion.
The post is misleading. HollyFrontier bought Sinclair oil refinery with a capacity of 115,000 bpd and after buying Sinclair oil, HollyFrontier’s capacity was raised to 678,000 bpd. So, HollyFrontier refinery had a previous capacity of 563,000 bpd before acquiring 100 percent of Sinclair oil refinery.
The 20 percent stake NNPC bought in Dangote refinery is 130,000 bpd.
A viral WhatsApp message suggested that the Nigeria’s state oil corporation (NNPC) wasted money on the stake bought from Dangote refinery, in comparison with a deal between two US Oil companies, HollyFrontier and Sinclair oil.
The message reads;
“A tale of two deals.
Holly frontier is buying a 678,000 BDP refinery bigger than Dangote refinery plus logistics, green and marketing assets for US$2.6 billion. NNPC pays US$2.7 billion for 20 percent of 650,000 BPD Dangote refinery that has not even started. What a joke.”
Ripples Nigeria checked for the capacity of Sinclair and found out that the company has two refineries with capacities of 85,000 and 30,000 bpd. It was also discovered that HollyFrontier had a 563,000 bpd refinery. Both companies are based in the US. While HollyFrontiers is headquartered in Dallas, Texas, Sinclair is in Salt Lake City.
Also, the 20 percent of 650,000 bpd Dangote refinery sold to NNPC is equivalent to 130,000 bpd.
So, while HollyFrontier bought 115,000 bpd refinery with logistics, green and marketing assets for US$2.6 billion, the 20 percent stake NNPC bought from Dangote for US$2.76 billion is for 130,000 bpd. In other words, NNPC, and by extension, Nigerians, got a good deal from Dangote refinery.
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