The Dangote Group has refuted claims by the Nigerian National Petroleum Company Limited (NNPCL) that it provided a $1 billion loan, backed by crude oil, to support the refinery facility.
In a statement issued yesterday, signed by Anthony Chiejina, the Group Chief Branding and Communications Officer, Dangote clarified that NNPCL did not provide any bailout for the refinery. He emphasized that the $1 billion mentioned represents only about five percent of the total investment in the refinery.
Chiejina explained that the partnership between Dangote and NNPCL was based on NNPCL’s strategic role as the largest off-taker of Nigerian crude and the sole supplier of gasoline in the country at the time.
He further noted that NNPCL acquired a 20 percent stake in the refinery, valued at $2.76 billion. The agreement involved an initial $1 billion upfront payment, with the remaining balance to be settled over five years through crude supply deductions and dividends.
“If we were struggling with liquidity challenges, we would not have given them such generous payment terms,” Chiejina stated, adding that the agreement was signed in 2021 when the refinery was still at the pre-commissioning stage.
NNPCL was unable to meet its commitment to supply 300,000 barrels of crude oil per day as agreed, Chiejina said, adding that NNPC had prior obligations to other financiers and lower-than-expected production. He added that as a result, the Dangote Group granted NNPCL a 12-month grace period to pay the remaining balance in cash, a deadline that expired on June 30, 2024.
He said because of NNPCL’s inability to meet the deadline, its equity share was revised to 7.24 per cent. Chiejina emphasised that NNPCL’s $1 billion investment was purely for equity acquisition and not a bailout during financial difficulties. “It is, therefore, inaccurate to claim that NNPCL facilitated a $1 billion investment amid liquidity challenges,” he said.
On Monday, NNPCL stated that securing a $1 billion loan backed by its crude was crucial in assisting the Dangote Refinery during its liquidity challenges.
Olufemi Soneye, the Chief Corporate Communications Officer of NNPCL, made this announcement at an energy relations stakeholders’ engagement, where he highlighted that the loan played a key role in enabling the Dangote Refinery’s progress.
