Uganda needs $4 billion to jumpstart its oil refinery as Nigeria’s NNPC eyes IPO




Nigeria's NNPC

Uganda, which has an estimated 2.5 billion barrels of crude oil reserves according to Statista, wants to build a refinery so it can be able to fully maximise every single drop of oil it extracts. The only problem is that building an oil refinery is quite expensive, especially at a time when many African countries are experiencing fiscal challenges.

By Emmanuel Abara Benson

So, the East African country is seeking to raise as much as $4 billion. And it has its eyes set on foreign investors, particularly those in the United States of America and Italy.

Business Insider Africa understands that the Ugandan Government had to shift focus to foreign investors following disappointment from some regional governments who, though initially showed interest in taking up equity stakes in the project, have failed to commit financially.

According to The East African, the project was expected to take off in 2018 but has not, due to this lack of commitment from the regional investors. The Ugandan Government is now targeting 2027 for takeoff, provided it is able to secure the needed funds from the foreign investors whom it is currently prospecting.

Over in Nigeria, the country’s formerly state-owned energy company has officially transitioned into a commercial venture. During an elabourate ceremony in Abuja yesterday, the company’s new name was officially unveiled as NNPC Ltd.

Group CEO, Mele Kyari, also told reporters that plans are underway to launch an Initial Public Offering (IPO) for the company by mid-2023.

“We are convinced that by the middle of next year, this company will be IPO ready, which means that you have the system, processes, and a company that is accountable to its stakeholders and shareholders,” Mele Kyari was quoted by Reuters to have said.

There are high expectations for NNPC Ltd as a private company. One of these expectations is that the company will, henceforth, start conducting its business affairs in a profitable manner.

Recall that the company, which has been in operation since 1977, disclosed its financial statements to the public for the first time in 2020, much to the dismay of many Nigerians. The financial report had shown some $3.6 billion (N1.5 trillion) accumulated losses over the years, with auditors (including PwC and SIAO Partners0 raising concerns over the oil company’s ability to continue as a going concern.

Source: Business Insider Africa