Kehinde Fajobi
The Dangote Petroleum Refinery has clarified misleading claims made by the Nigerian National Petroleum Company Limited (NNPCL) regarding the $1bn investment in the refinery’s operations.
In a statement, Dangote Refinery described the information presented by NNPCL as “misinformation” and emphasized that the $1bn crude-backed loan is just five percent of the total investment for the 650,000 barrels per day refinery.
On Monday, NNPCL’s Chief Corporate Communications Officer, Mr Olufemi Soneye, stated during a stakeholder’s engagement that the national oil company secured the $1bn loan to support the refinery.
He hailed the move as part of NNPCL’s commitment to fostering public-private partnerships for economic growth.
However, responding to inquiries from stakeholders, Dangote’s Group Chief Branding and Communications Officer, Anthony Chiejina, called NNPCL’s claim inaccurate.
He clarified that the $1bn loan amounted to just five percent of the total refinery investment.
Chiejina further explained that NNPCL had initially proposed a 20 percent stake valued at $2.76bn in 2021, but this did not materialize due to NNPCL’s inability to supply the agreed 300,000 barrels of crude per day.
Instead, NNPCL’s investment stands at $1bn, or a 7.24 percent equity share in the refinery.
He added, “Our decision to enter into a partnership with NNPCL was based on recognition of their strategic position in the industry as the largest offtake of Nigerian crude… If we were struggling with liquidity issues, we wouldn’t have given them such generous payment terms.”
In 2021, when the agreement was signed, the refinery was in its pre-commission stage, and payment terms were credit-based, not cash-driven.
However, NNPCL failed to meet its crude supply commitments, which led to a downgrade of its equity share.
Chiejina concluded, “It is, therefore, inaccurate to claim that NNPCL facilitated a $1bn investment amid liquidity challenges. NNPCL invested $1bn in the refinery to acquire an ownership stake of 7.24 percent.”
The Dangote Refinery maintains its partnership with NNPCL but urged all stakeholders to adhere to accurate facts when reporting on the investment.