….As NNPCL Justifies Investment Cap On Facility
The management of Dangote Refinery and Petrochemicals Company Limited has put the current equity stake of the Nigerian National Petroleum Company Limited (NNPCL) on the multi-billion US dollar at a mere 7.2%, despite its earlier pledge to acquire 20% of the facility’s equity.
The Chairman of Dangote Group, Aliko Dangote, who disclosed this on Sunday in Lagos while taking journalists on a tour of the facility, lamented that the state-controlled oil company failed to pay the balance of its equity stake on the refinery, which became due in June.
The NNPCL’s management had in September 2021 announced that the company acquired a 20% stake in the plant for $2.76 billion.
Out of the amount, the company committed $1.036 billion funding from Lekki Refinery Funding Limited, of which $1 billion was paid to Dangote Refinery and $36 million was for transaction costs.
Based on the terms of the deal, the company was to play the balance on its equity totalling $1.76 billion through a combination of a $2.5/barrel discount on 300,000 barrels per day of crude oil to be supplied to the refinery, and 100% of dividends due to it as may be declared by the company.
Speaking on the current position of the NNPCL’s stake, Dangote said: “NNPC no longer owns a 20 per cent stake in the Dangote refinery. They were meant to pay their balance in June but have yet to fulfil the obligations. Now, they only own a 7.2 per cent stake in the refinery.”
Dangote hinted that the company’s management was planning to commence production of Premium Motor Spirit (petrol) at the refinery from August this year following the resolution of crude oil supply issues with the International Oil Companies (IOCs) based on the interventions of the NNPCL and the Federal Government.
According to him, the production of fertilisers in the plant is also scheduled to be flagged off within two weeks in order to enable farmers procure fertilisers for their farming activities this planting season.
The industrialist explained that that there had been huge demand for fertilisers from Nigerian and other African countries’ farmers from the company and the plan to immediately produce the inputs was to respond to their growing needs.
But then, reacting to Dangote’s comments, the NNPCL, in a statement issued on Sunday by its spokesman, Olufemi Soneye, clarified that the company made a commercial decision to cap its investment at the amount already paid.
He recalled: “Several months ago, we made a commercial decision to cap our investment at the amount already paid. This decision was taken by NNPC Ltd and has no impact on our business.
“NNPC Limited periodically assesses its investment portfolio to ensure alignment with the company’s strategic goals.
“The decision to cap its equity participation at the paid-up sum was made and communicated to Dangote Refinery several months ago”, Soneye added.
