The Dangote Petroleum Refinery has accused the Nigerian National Petroleum Company Limited of disseminating inaccurate information regarding its $1 billion investment in the refinery.
The company asserted that the details provided by NNPCL were misleading and distorted the true nature and scope of the investment, potentially confusing stakeholders and the general public.
The refinery clarified that the $1 billion crude-backed loan represents only five percent of the total investment required to establish the 650,000 barrels per day facility.
On Monday, the NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, stated at a stakeholders’ meeting that the company had secured the loan to assist in bringing the refinery into operation.
He described the move as part of NNPCL’s commitment to fostering public-private partnerships for economic advancement.
However, in a statement issued on Wednesday, Anthony Chiejina, Dangote Refinery’s Group Chief Branding and Communications Officer, rebutted the claim, describing it as “misinformation.”
Addressing the matter in a statement titled “Addressing NNPCL’s Misinformation,” Chiejina said, “We have received numerous inquiries from the media and other concerned stakeholders seeking clarification on a recent report attributed to the Nigerian National Petroleum Company Limited that their decision to secure a $1bn loan backed by its crude was instrumental in supporting the Dangote refinery during liquidity challenges.
“We would like to clarify that this is a misrepresentation of the situation as $1bn is just about 5 percent of the investment that went into building the Dangote Refinery.”
The statement further highlighted that in 2021, NNPCL had proposed acquiring a 20 percent stake in the refinery for $2.76 billion, but the plan was hindered by its inability to supply the agreed 300,000 barrels of crude oil per day.
Instead, NNPCL was able to invest $1 billion, equivalent to a 7.24 percent equity value.
“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 and, at the time, the sole supplier of gasoline into Nigeria,” Chiejina stated.
“We agreed on the sale of a 20 percent stake at a value of $2.76bn. Of this, we agreed that they will only pay $1bn while the balance will be recovered over a period of five years through deductions on crude oil that they supply to us and from dividends due to them. If we were struggling with liquidity challenges, we wouldn’t have given them such generous payment terms.
“As of 2021, when the agreement was signed, the refinery was at the pre-commission stage. In addition, if we were struggling with liquidity issues, this agreement would have been cash-based rather than credit-driven.”
The statement noted that NNPCL’s inability to fulfill its crude oil supply obligations within a 12-month grace period led to a reduction of its equity share to 7.24 percent.
“We subsequently gave them 12 months to pay cash for the balance of their equity given their inability to supply the agreed crude oil volume. NNPCL failed to meet this deadline which expired on June 30th, 2024. As a result, their equity share was revised down to 7.24 percent. These events have been widely reported by both parties,” Chiejina explained.
He emphasized, “It is, therefore, inaccurate to claim that NNPCL facilitated a $1bn investment amid liquidity challenges. Like all business partners, NNPCL invested $1bn in the refinery to acquire an ownership stake of 7.24 percent, which is beneficial to its interests.
“NNPCL remains our valued partner in progress, and it is imperative for all stakeholders to adhere to the facts and present the narrative in the correct context, to guide the media in reporting
