The Dangote Group has addressed recent claims attributed to the Nigerian National Petroleum Company Limited (NNPCL) regarding its involvement in the financing of the Dangote Refinery.
In a statement released by Anthony Chiejina, Group Chief Branding and Communications Officer, the company refuted the narrative that a $1 billion loan backed by NNPCL’s crude oil was pivotal to supporting the refinery during liquidity challenges.
Chiejina clarified that the $1 billion loan mentioned in the reports constitutes only about 5% of the total investment in building the Dangote Refinery. The partnership with NNPCL, he explained, was formed based on the latter’s strategic importance as the largest off-taker of Nigerian crude and, at the time, the sole supplier of gasoline to the country.
The arrangement involved the sale of a 20% equity stake in the refinery to NNPCL at a value of $2.76 billion. Under the agreement, NNPCL was to pay $1 billion upfront, with the remaining amount to be recovered over five years through crude oil supply deductions and dividends. The structure of this deal, Chiejina emphasized, underscores that liquidity challenges were not a factor, as it was credit-based rather than requiring immediate cash.
As part of the agreement, NNPCL committed to supplying 300,000 barrels of crude oil daily to the refinery. However, the company was unable to meet this obligation, citing prior commitments of its crude cargoes to other financiers. Consequently, the Dangote Group gave NNPCL a 12-month grace period to pay the balance of its equity in cash. When the deadline expired on June 30, 2024, without payment, NNPCL’s stake was revised downward to 7.24%.
“This sequence of events has been widely reported by both parties,” the statement read. “It is therefore inaccurate to claim that NNPCL facilitated a $1 billion investment amid liquidity challenges. Like any business partner, NNPCL invested $1 billion in the refinery to acquire a 7.24% ownership stake, which aligns with its interests.”
The Dangote Group reaffirmed its commitment to its partnership with NNPCL, urging all stakeholders and the media to adhere to the facts and present the narrative accurately. The company emphasized the importance of maintaining a clear and truthful account of events to foster transparency and informed public discourse.
