The Chief Executive Officer (CEO) of Dangote Refinery, Aliko Dangote, has revealed that the Nigerian National Petroleum Corporation (NNPC) Limited no longer holds a 20% stake in Dangote Refinery.
During a media parley at the refinery on Sunday, Dangote disclosed that the NNPC now owns only 7.2% of the refinery. This change is due to the NNPC’s failure to pay the balance of their share, which was due last month in June.
He explained that it was because the NNPC had promised to provide the funds, but the group has not been able to meet its obligations, which reduced its stake in the refinery to 7.2 percent.
NNPC Stake in Dangote Refinery Now 7.2%
According to Alhaji Aliko Dangote, the NNPC has only paid for the purchase consideration for 7.2% of the refinery and is still in the process of making a balance payment by June 2024.
However, they opted to retain their current stake without proceeding beyond the 7.2% ownership.
“The agreement was initially for 20%, but the NNPC did not pay the balance of the money up until last year. We gave them an extension up to June 2024, and they decided to stick with their already paid 7.2%,” Dangote stated. “So, NNPC, the government, owns only 7.2%, not 20%.”
This statement has surprised many Nigerians, who for years were informed by the government that it had a 20% stake in the refinery.
Background.
In 2021, Nigerian State Oil Company Group Managing Director, Mele Kyari, stated that the decision to acquire a stake in the Dangote refinery was driven by its profit potential and the strategic need to have a say in an enterprise of this magnitude, which is critical for Nigeria’s and Africa’s energy security and fiscal stability.
It was earlier reported by Ejes Gist News in the year that its 2022 audited financial statement ranked NNPC Ltd as having acquired a 20% stake in the Dangote refinery at $2.76 billion. This was financed by a $1.036 billion loan from Lekki Refinery Funding Limited, where payment of $1 billion to Dangote Refinery and allocation of $36 million to cover transaction costs were made.
He addressed a number of issues including the sourcing of crude oil for the refinery, saying they had resorted to buying from the United States and Brazil, but the government was intervening to correct the situation with new regulations pending implementation.
What You Should Know.
The Dangote Refinery, located in the Lekki Free Zone, Lagos, Nigeria, is a massive oil project with a capacity of 650,000 barrels per day (BPD). Owned by the Dangote Group, it aims to be Africa’s largest oil refinery and the world’s largest single-train facility.
The Dangote refinery is bound to create 9,500 jobs directly and about 25,000 others indirectly, helping to galvanize the economy of the area. The facility, upon completion, is expected to refine about 50 million liters of petroleum and 15 million liters of diesel per day. This means 10.4 million tonnes of petroleum products yearly, translating into 4.6 million tonnes of diesel and 4 million tonnes of jet fuel per year. A fertilizer plant is also part of the facility, which will use byproducts from the refinery as crude, a move likely to strengthen its economic and environmental viabilities.
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