By Chinelo Obogo
Chairman of Dangote Group, Mr Aliko Dangote, on Sunday, announced that the Nigerian National Petroleum Company (NNPC) Ltd no longer holds a 20 per cent share in the Dangote Refinery as it has been reduced to 7.2 per cent.
During a press briefing at the refinery in Lagos on Sunday, Dangote explained the reduction of NNPC Ltd’s stake to 7.2 per cent was due to its failure to pay the balance of their share, which was due in June.
According to him, despite promises to provide the funds, the NNPC has not met its financial obligations, resulting in a decreased stake in the $19 billion refinery.
He 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 fulfill the obligations. Now, they only own a 7.2 per cent stake in the refinery,” Dangote stated.
In August 2021, with the approval of former President Muhammadu Buhari, the NNPC acquired a 20 per cent stake in the Dangote refinery for $2.76 billion. The deal included an agreement for the national oil company to supply 300,000 barrels of crude per day to the refinery, while taking a $3.3 billion loan from Afreximbaank to be repaid with crude.
In January this year, the global Extractive Industry Transparency Initiative (EITI) raised concerns about the Nigerian National Petroleum Corporation’s (NNPC) 20 per cent stake in the refinery, noting that many questions remained unanswered regarding other crude-backed loans.
Alex Gordy, EITI’s Technical Director, highlighted that the terms of these contracts remain obscure, stressing the need for clarity on interest rates, repayment schedules, and valuation.
In 2019, NNPC joined the EITI as a supporting company and became a member of the EITI’s state-owned enterprise (SOE) transparency network. This move was intended to enhance the transparency and accountability of NNPC, which has often faced accusations of opaqueness.
Meanwhile, reports indicate that the refinery is increasing its production of Premium Motor Spirit (PMS), commonly known as petrol, with sales to local distributors expected to begin in August. According to the company’s projection report, the refinery will start producing PMS this month and aims to reach a production level of 500,000 barrels per day (bpd), equivalent to about 15 cargoes monthly. The refinery plans to achieve its full capacity of 650,000 bpd by the first quarter of 2025.
The report details: “Successful completion of trial run in January 2024. Refined and intermediate products include polypropylene, naphtha, RCO, gasoline, diesel, and jet fuel.
Steady state production phase commenced in March 2024. Ramping up production to reach 500kbpd (15 crude cargoes a month) by next August, 550kbpd by the end of the year, and 650kbpd by Q1 2025. Gasoline production to commence in July with sales from August.”
During a media briefing, Dangote also announced plans to list the refinery’s fertilizer and petrochemical business in the first quarter of 2025.