The Dangote Group has dismissed claims made by the Nigerian National Petroleum Company Limited (NNPCL) that a $1 billion loan secured by NNPCL was pivotal in addressing liquidity challenges at the Dangote Refinery.
In a press statement released on Wednesday by the Group Chief Branding and Communications Officer, Anthony Chiejina, the Dangote Group clarified that the $1 billion represents only 5% of the investment that went into constructing the refinery.
“Our decision to enter into a partnership with NNPCL was based on recognition of their strategic position in the industry as the largest offtaker of Nigerian crude and, at the time, the sole supplier of gasoline into Nigeria,” the statement read.
According to the agreement signed in 2021, NNPCL acquired a 20% equity stake in the refinery valued at $2.76 billion. However, only $1 billion was to be paid upfront, while the remaining balance would be recovered over five years through crude oil deductions and dividends.
“If we were struggling with liquidity challenges, we wouldn’t have given them such generous payment terms,” the statement emphasised.
The Dangote Group further explained that the agreement was credit-driven, not cash-based, highlighting that as of 2021, the refinery was still at the pre-commissioning stage.
The statement also revealed that NNPCL later failed to supply the agreed 300,000 barrels per day of crude oil due to prior commitments to other financiers. This prompted a revision of the payment terms, with a 12-month cash payment deadline for the balance expiring on June 30, 2024.
Following NNPCL’s inability to meet the deadline, their equity share was reduced to 7.24%.
“These events have been widely reported by both parties. It is, therefore, inaccurate to claim that NNPCL facilitated a $1 billion investment amid liquidity challenges,” the statement clarified.
While reaffirming its commitment to a productive partnership with NNPCL, the Dangote Group urged stakeholders and the media to adhere to the facts and ensure accurate reporting for the benefit of the public.
Faridah Abdulkadiri
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