During a press briefing on Sunday, it was made known by Aliko Dangote, the chief executive officer (CEO) of Dangote refinery and richest man in Africa that the Nigerian National Petroleum Company (NNPC) does not own 20% of the refinery’s stake any more.
Launched in May 2023 at the Lekki Free Zone near Lagos, Nigeria, Dangote Refinery which is one of Dangote’s Group Subsidiary is expected to produce about 650,000 barrels per day. In a year, they aim to produce million tonnes of gasoline, diesel, jet fuel, polypropylene, propane and carbon black feed. Being Africa’s biggest oil refinery and the world’s biggest facility that uses only one crude distillation unit (CDU)— a single-train facility, it was set to be the change Nigeria’s economy needed by helping to end the country’s issues of fuel imports.
The refinery was established with the contribution of Dangote with a 50% worth investment and 50% loan from Nigeria domestic banks and foreign banks. The Nigerian government used the NNPC Limited to own a 20% right of possession in the refinery worth $2.7bn. The government per agreement is to give the refinery an initial 300,000 barrels of crude oil per day. Additionally, according to Mele Kyari —the corporation’s chief executive officer— in August 2022, NNPC Limited has the right of first refusal to supply crude to the refinery.
Aliko Dangote the Chief Executive Officer (CEO) of Dangote Refinery in a press briefing on Sunday made it known that NNPC does not own up to 20% stake in Dangote Refinery as they used to when the refinery was inaugurated . He stated that the company now owns only 7.2% stake due to their inability to fulfill its obligation by providing the promised funds which was due last month, June.
In his words, “The agreement was actually 20% which we had with NNPC and they did not pay the balance of the money up till last year and then we gave them another extension up till June (2024) and they said that they would remain where they have already paid which is 7.2%. So NNPC, the government owns only 7.2% not 20%”. This announcement shocked most Nigerians who had believed that NNPC owned up to 20% stake out of the refinery
The NNPC attested to this fact in a statement late Sunday through the company’s spokesman, “NNPC Limited periodically assesses its investment portfolio to ensure alignment with the company’s strategic goals”.
Nairametrics had reported at the beginning of the year that the audited financial status of Nigeria National Petroleum Company (NNPC) Limited showed that the company had bought the 20% stake in the refinery for $2.76 billion. A transaction that Mele Kyari, the Nigerian state Oil company Managing Director, had in 2021 stated that the decision was a result of the profit potential of the refinery business. The NNPC 2022 audited financial statements reads as follows:
“In September 2021, the NNPC entered into a forward sale agreement with Lekki Refinery Funding Limited, to supply 35,000 barrels of crude oil per day for the settlement of the $1.036 billion (N426.2 billion) funding already received for the financing of the investment in Dangote refinery.
“The interest rate for the facility is a three-month London Interbank Offer Rate (LIBOR) plus 6.125 per cent. The arrangement has been scheduled to commence on August 30, 2023. Project Bison has been transferred to NNPC Limited.
