Dangote Refinery Clarifies NNPCL’s Investment Role Amid Liquidity Claims
Dangote Refinery recently addressed misconceptions about the Nigerian National Petroleum Company Limited (NNPCL)’s involvement in a $1 billion investment for the project. They emphasized that liquidity constraints significantly affected this process.
Anthony Chiejina, the Group Chief Branding and Communications Officer at Dangote, firmly refuted claims made by NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye. Specifically, Chiejina stated that it is misleading to say NNPCL facilitated the investment during financial difficulties.
Investment Details
Chiejina confirmed that NNPCL invested $1 billion in the refinery, thereby acquiring a 7.24% ownership stake. However, he noted that this amount represents only about 5% of the total investment in the Dangote Refinery.
“We decided to partner with NNPCL because they are, without a doubt, the largest off-taker of Nigerian crude and the sole gasoline supplier at the time,” Chiejina explained. The agreement involved selling a 20% stake valued at $2.76 billion. Notably, NNPCL made an initial payment of $1 billion, while the remaining amount would be settled over five years through deductions from crude oil supplied and dividends.
Clarifying Liquidity Issues
Moreover, Chiejina challenged the claim that liquidity issues would have allowed Dangote to offer such favorable payment terms. He pointed out that the refinery was still in its pre-commissioning stage when they signed the agreement in 2021. When NNPCL subsequently struggled to supply the agreed 300,000 barrels per day of crude, they received an additional 12 months to pay cash for the rest of their equity. Unfortunately, NNPCL missed the June 30, 2024, deadline, leading to a necessary reduction of their equity share.
“It’s, therefore, inaccurate to claim that NNPCL facilitated a $1 billion investment amid liquidity challenges,” Chiejina reiterated. He stressed the importance of stakeholders understanding the facts accurately.
NNPCL’s Contributions
Furthermore, at a recent event in Abuja, Soneye praised NNPCL’s vital role in supporting Dangote with the refinery project. He highlighted major milestones achieved under the leadership of Mele Kyari. Soneye noted that the restart of the Port Harcourt Refinery marked a significant step toward Nigeria’s energy self-sufficiency. In addition, he mentioned NNPCL’s efforts to promote Compressed Natural Gas (CNG) as a cleaner and more affordable energy alternative.
Soneye also shared that NNPC declared a profit for the first time in decades, and they have exceeded 2024 profit projections. He further noted that Kyari facilitated a $3 billion Gazelle loan to stabilize the federation during a difficult foreign exchange crisis.
In conclusion, both Dangote and NNPCL stress the importance of clear communication regarding their partnership. They agree that accurate representation of facts in the media is crucial. As the energy landscape evolves, building strong stakeholder relationships will remain vital for achieving their shared objectives.
