The Dangote Refinery has issued a statement to clarify a recent claim by the Nigerian National Petroleum Company Limited (NNPCL) that it facilitated a $1 billion investment in the refinery during liquidity challenges. According to Anthony Chiejina, Group Chief Branding and Communications Officer of Dangote Industries Limited, this claim is a misrepresentation of the facts.
The $1 billion investment was actually part of a partnership deal between Dangote Refinery and NNPCL, where the latter acquired a 20% stake in the refinery for $2.76 billion. The payment terms were structured such that NNPCL would pay $1 billion upfront, with the balance recovered over five years through crude oil supplies and dividends.
Chiejina argued that if the refinery was indeed facing liquidity challenges, it would not have offered such generous payment terms to NNPCL. He also noted that the refinery was still in its pre-commission stage in 2021 when the agreement was signed, and that the deal was not cash-based but rather credit-driven.
The partnership, however, took a hit when NNPCL failed to supply the agreed 300,000 barrels of crude oil per day, citing commitments to financiers. This failure to meet the agreed terms led to a revision of NNPCL’s equity share in the refinery.
Dangote Refinery gave NNPCL a 12-month window to pay the outstanding balance in cash, which expired on June 30, 2024. Consequently, NNPCL’s equity share was revised downward to 7.24%.
Chiejina emphasized that NNPCL’s investment in the refinery was not a result of liquidity challenges, but rather a strategic partnership. He noted that the refinery’s investment is valued at over $19 billion, making the $1 billion investment by NNPCL just 5% of the total investment.
The statement from Dangote Refinery urged all stakeholders to adhere to the facts and present the narrative in the correct context. This is to ensure accurate reporting by the media for the benefit of stakeholders and the public.
NNPCL remains a valued partner in progress, according to Chiejina. He reiterated that the partnership is beneficial to both parties and that Dangote Refinery is committed to ensuring the success of the project.
In conclusion, the Dangote Refinery has set the record straight regarding NNPCL’s claim of facilitating a $1 billion investment in the refinery during liquidity challenges. The refinery has emphasized that the investment was a strategic partnership and not a result of liquidity challenges.
