The Dangote Group has clarified claims surrounding a $1 billion investment by the Nigerian National Petroleum Company Limited (NNPCL) in the Dangote Refinery. In a press statement released on December 18, 2024, Anthony Chiejina, the Group Branding and Communications Officer, described these reports as a misrepresentation of facts, emphasizing that $1 billion accounts for only 5% of the total investment in the refinery.
According to Dangote Group, the partnership with NNPCL was born out of the latter’s strategic importance as the largest buyer of Nigerian crude and the sole gasoline supplier in the country. The agreement, finalized in 2021, involved the sale of a 20% stake in the refinery for $2.76 billion. Dangote Group explained that NNPCL was to make an initial $1 billion payment while the remaining balance would be settled over five years through deductions from crude oil supplies and dividend payments.
The statement dismissed claims of liquidity challenges as the motivation for this deal, highlighting that such terms would not have been extended if the refinery was in financial distress. At the time of the agreement, the refinery was still in its pre-commissioning phase, with no need for credit-based arrangements.
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However, Dangote Group revealed that NNPCL failed to deliver the agreed 300,000 barrels of crude oil per day due to commitments to other financiers. Consequently, a 12-month grace period was granted for NNPCL to provide cash payments to meet its equity obligations. When the deadline expired on June 30, 2024, with no resolution, NNPCL’s equity stake was revised downward to 7.24%.
The statement further stressed that the NNPCL’s investment was purely a business decision, aimed at acquiring an equity stake beneficial to its interests, and not a bailout for Dangote Refinery. The Dangote Group reiterated its commitment to maintaining transparency and urged stakeholders and the public to rely on accurate reports regarding the partnership.
