The Chief Executive Officer (CEO) of Dangote Refinery, Aliko Dangote, has revealed that the Nigerian National Petroleum Corporation (NNPC) Limited no longer owns a 20% stake in Dangote Refinery.
Dangote disclosed this during a media parley at the refinery on Sunday.
The business mogul revealed that the Nigerian oil company now owns only 7.2% of the refinery due to the NNPC’s failure to pay the balance of their share, which was due last month in June.
He stated that while the NNPC had promised to provide the funds, it has been unable to meet its obligations, thus reducing its stake in the refinery to 7.2%.
NNPC Stake now 7.2%
According to Alhaji Dangote, NNPC has only paid purchase consideration for 7.2% and was expected to pay the balance in June, however, they declined to proceed beyond the 7.2% stake.
“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 (sic) owns only 7.2% not 20%.” Dangote stated.
The statement is a surprise to most Nigerians who for years have been told by the government that it had a 20% stake in the refinery.
Nigerian State Oil company Group Managing Director, Mele Kyari stated in 2021 that the decision to own a stake in the refinery was driven by the profit potential of the refinery business and the need to have a say in a business of this magnitude, which borders on energy security for Nigeria and Africa, with huge implications for fiscal security of the country.
Earlier this year, Nairametrics reported that the 2022 audited financial statement of the Nigerian National Petroleum Company (NNPC) Ltd contained information which showed that it had acquired a 20% stake in Dangote refinery for $2.76 billion through a $1.036 billion funding from Lekki Refinery Funding Limited of which $1 billion was paid to Dangote Refinery and $36 million was for transaction costs.
Aliko Dangote also spoke on a wide range of issues, including the challenges with supplying crude to the refinery confirming that they have been sourcing from the US and Brazil. He however, stated that the government has stepped in to resolve the situation as he awaits implementation of new regulations.
Backstory
In March 2021, Nairametrics reported that NNPC was planning to raise the sum of $2.76 billion in credit facility to purchase 20% stake in Dangote refinery.
The NNPC Chief Operating Officer, Refining and Petrochemicals, Mr Mustapha Yakubu, said this plan is to secure Nigeria’s place in the massive project, making it resource-dependent.
He said this is part of the then government’s plan to work with private oil companies to safeguard the country’s energy security without underming the plans to rehabilitate its own refineries.
However, Dangote, said the company has only paid enough to acquire 7.2% of the refinery, and has failed to fulfill its obligations that was due last month.
What you should know
The Dangote Refinery is a massive oil project located in the Lekki Free Zone, Lagos, Nigeria, boasting a capacity of 650,000 barrels per day (BPD). Owned by the Dangote Group, it aims to become Africa’s largest oil refinery and the world’s biggest single-train facility.
The refinery is expected to generate 9,500 direct jobs and an additional 25,000 indirect jobs, providing a substantial economic boost to the region.
Once fully operational, the refinery will produce approximately 50 million litres of petrol and 15 million litres of diesel daily, equating to 10.4 million tonnes of petroleum products annually.
It will also yield 4.6 million tonnes of diesel and 4 million tonnes of jet fuel per year. Moreover, the facility includes a fertiliser plant that will utilize by-products from the refinery as raw materials, further enhancing its economic and environmental impact.
Note: This story was updated to capture the exact comment of Aliko Dangote
