Dangote Refinery has tackled Nigerian National Petroleum Company (NNPC) Limited over claimed that its $1 billion oil-backed loan agreement was instrumental in supporting the refinery operations during liquidity challenges.
NNPC’s Chief Corporate Communications Officer, Olufemi Soneye had said the privatized oil company helped Dangote to achieve the Refinery while speaking at an Energy Relations Stakeholder Engagement in Abuja.
Soneye said under the visionary leadership of Mele Kyari, NNPC Ltd has achieved groundbreaking milestones, redefining the trajectory of Nigeria’s oil and gas sector.
Soneye listed the restart of the Port Harcourt Refinery, which he said marked a significant turning point in Nigeria’s quest for energy self-sufficiency, and reaffirmed the company’s commitment to revitalising the nation’s refining capacity.
He explained that the NNPCL has also championed the adoption of Compressed Natural Gas (CNG) as an alternative energy source, offering Nigerians a cleaner and more cost-effective solution amidst rising global energy costs.
He said “In a historic achievement, NNPC, under Kyari’s leadership, declared profit for the first time in decades, marking a significant financial turnaround. The company has already exceeded its profit projections for 2024, a testament to the transformative reforms it has implemented.
“Additionally, Kyari facilitated the $3 billion Gazelle loan, a critical intervention that helped stabilize the federation during a challenging foreign exchange crisis.
“As a responsible energy company, NNPC Ltd continues to strengthen Nigeria’s energy sector while solidifying its legacy as a transformative force and a global game-changer.
“Energy relations are the backbone of NNPC Ltd’s operations and strategic aspirations as an integrated energy company.
In a rapidly evolving global energy landscape, fostering strong relationships with stakeholders across the value chain is not just a priority but a necessity for achieving our objectives and ensuring energy for today and tomorrow,” he said.
Reacting to the statement, Anthony Chiejina, Group Chief Branding and Communications Officer at Dangote said it is inaccurate to claim that NNPCL facilitated a $1 billion investment amid liquidity challenges.
Chiejina said like all business partners, NNPCL invested, $1 billion in the Refinery to acquire an ownership stake of 7.24% stake that is beneficial to its interests.
“We would like to clarify that this is a misrepresentation of the situation as $1bn is just about 5% of the investment that went into building the Dangote 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.
“We agreed on the sale of a 20% stake at a value of $2.76 billion. Of this, we agreed that they will only pay $1 billion while the balance will be recovered over a period of 5 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 at 2021 when the agreement was signed, the refinery was at the pre-commission stage.
“In addition, if we were struggling with liquidity issue, this agreement would have been cash based rather than credit driven.
Unfortunately, NNPCL was later unable to supply the agreed 300 thousand barrels a day of crude given that they had committed a greater part of their crude cargoes to financiers with the expectation of higher production which they were unable to achieve.
“We subsequently gave them a 12-month period for them 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”, Anthony Chiejina, Dangote Group spokesperson said in a statement,
Chiejina said as a result, NNPC equity share was revised down to 7.24%. “It is, therefore, inaccurate to claim that NNPCL facilitated a $1 billion investment amid liquidity challenges.
“Like all business partners, NNPCL invested, $1 billion in the Refinery to acquire an ownership stake of 7.24% stake that 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 accurately for the benefit of our stakeholders and the public”, Dangote stated.
