$1Billion Loan: NNPCL Invested, Didn’t Help Us Out Of Liquidity Challenges -Dangote Refinery

By Daniel Dafe

The Dangote Refinery has clarified a recent report attributed to the Nigerian National Petroleum Company Limited (NNPCL) that their decision to secure a $1 billion loan backed by its crude was instrumental in supporting the Dangote refinery during liquidity challenges.

The statement on Wednesday signed by Anthony Chiejina, Group Chief Branding and Communications Officer, said: “We would like to clarify that this is a misrepresentation of the situation as $1bn is just about 5% of the investment that went into building the Dangote Refinery.”

According to the statement, the “decision to enter into a partnership with NNPCL was based on recognition of their strategic position in the industry as the largest off taker of Nigerian crude and at the time, the sole supplier of gasoline into Nigeria.”

Adding: “We agreed on the sale of a 20% stake at a value of $2.76 billion. Of this, we agreed that they will only pay $1 billion while the balance will be recovered over a period of 5 years through deductions on crude oil that they supply to us and from dividends due to them. If we were struggling with liquidity challenges, we wouldn’t have given them such generous payment terms. As at 2021 when the agreement was signed, the refinery was at the pre-commission stage. In addition, if we were struggling with liquidity issue, this agreement would have been cash based rather than credit driven.”

The statement continued: “Unfortunately, NNPCL was later unable to supply the agreed 300 thousand barrels a day of crude given that they had committed a greater part of their crude cargoes to financiers with the expectation of higher production which they were unable to achieve.

ALSO READ: No More Handwritten Lists In Delta APC Congresses – Omo-Agege Declares

“We subsequently gave them a 12-month period for them to pay cash for the balance of their equity given their inability to supply the agreed crude oil volume. NNPCL failed to meet this deadline which expired on June 30th 2024. As a result, their equity share was revised down to 7.24%. These events have been widely reported by both parties.”

Furthermore, Dangote Refinery said that it is inaccurate to claim that NNPCL facilitated a $1 billion investment amid liquidity challenges, saying that “like all business partners, NNPCL invested, $1 billion in the Refinery to acquire an ownership stake of 7.24% stake that is beneficial to its interests.”

“NNPCL remains our valued partner in progress, and it is imperative for all stakeholders to adhere to the facts and present the narrative in the correct context, to guide the media in reporting accurately for the benefit of our stakeholders and the public,” the statement concluded..