by Niyi Jacobs
Dangote Refinery has refuted claims by the Nigerian National Petroleum Company Limited (NNPCL) suggesting that its $1 billion loan-backed investment was critical in addressing liquidity challenges at the refinery. In a detailed statement, Anthony Chiejina, the Group Chief Branding and Communications Officer, clarified that this narrative misrepresents the facts.
“The $1 billion referenced constitutes only 5% of the refinery’s total investment,” Chiejina stated. He explained that the partnership with NNPCL was rooted in the company’s strategic position as Nigeria’s largest crude offtaker and primary supplier of gasoline, not due to financial difficulties.
In 2021, NNPCL agreed to purchase a 20% stake in the refinery for $2.76 billion. Of this amount, only $1 billion was to be paid upfront, while the balance was structured for recovery over five years through crude supply and dividend deductions. Chiejina emphasized that if the refinery had been struggling financially, the deal would have required full cash payment rather than such lenient terms.
Challenges arose when NNPCL was unable to meet its commitment to supply 300,000 barrels of crude oil daily, citing pre-existing obligations to financiers. To accommodate this, the refinery granted NNPCL a 12-month extension to pay cash for the remaining equity balance. However, by the expiration of the grace period on June 30, 2024, the payment had not been made, leading to a reduction of NNPCL’s equity stake to 7.24%.
Chiejina reaffirmed that NNPCL’s $1 billion investment was for a minority ownership stake and not a bailout for liquidity issues. He urged stakeholders and the media to present the situation accurately to preserve transparency and informed reporting.
“NNPCL remains a valued partner in progress,” Chiejina concluded, “but it is essential to maintain clarity and accuracy in discussions surrounding this partnership.”
