The Nigerian National Petroleum Company (NNPC) Limited has explained why it holds only a 7.2% equity in the $19 billion Dangote Refinery, instead of the widely speculated 20%.
Intel Region reports that the CEO of Dangote Refinery, Aliko Dangote, speaking at a media event at the refinery on Sunday, announced that NNPC Limited no longer holds a 20% stake in the refinery.
He explained that the NNPC’s share has been reduced to 7.2% because the corporation failed to pay the balance of their share, which was due in June.
According to Dangote, NNPC has only paid purchase consideration for 7.2% and was expected to pay the balance in June, however, they declined to proceed beyond the 7.2% stake.
“The agreement was actually 20% which we had with NNPC and they did not pay the balance of the money up till last year then we gave them another extension up till June (2024) and they said that they would remain where they have already paid which is 7.2%. So NNPC, the government, owns only 7.2%, not 20%.” Dangote stated.
The statement is a surprise to most Nigerians who for years have been told by the government that it had a 20% stake in the refinery.
NNPC in its 2022 audited financial statement showed that it had acquired a 20% stake in the Dangote refinery for $2.76 billion through a $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.
Meanwhile, NNPC has addressed the company’s recent decision regarding its investment in the Dangote Refinery in statement released on Sunday by Femi Soneye, the Chief Corporate Communications Officer of NNPC
Soneye said that the decision to reduce their investment was carefully considered and communicated several months ago to Aliko Dangote.
He explained that this change occurred because NNPCL failed to pay the balance of their share, which was due in June.
“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,” NNPC said.
