The Dangote Group has dismissed claims by the Nigerian National Petroleum Company Limited (NNPCL) that it provided a $1 billion loan, backed by crude oil, to assist the Dangote Refinery during financial difficulties.
In a statement issued yesterday by Anthony Chiejina, Group Chief Branding and Communications Officer, Dangote clarified that the $1 billion mentioned represented only about 5% of the total investment in the refinery. Chiejina stressed that the funds were part of an equity acquisition agreement and not a bailout.
The partnership with NNPCL was based on its role as the largest buyer of Nigerian crude and the sole gasoline supplier in the country at the time.
NNPCL acquired a 20% stake in the refinery valued at $2.76 billion, agreeing to pay $1 billion upfront, with the remainder to be settled over five years through crude supply deductions and dividends.
“If we were struggling with liquidity challenges, we would not have given them such generous payment terms,” Chiejina remarked, noting that the agreement was finalised in 2021 when the refinery was still under construction.
However, NNPCL failed to meet its commitment to supply 300,000 barrels of crude daily, citing prior obligations to other financiers and reduced production levels. As a result, Dangote granted NNPCL a 12-month extension to pay the outstanding balance in cash, a deadline that expired on 30 June 2024.
Due to NNPCL’s inability to meet the revised terms, its equity share in the refinery was adjusted to 7.24%. Chiejina emphasised that the $1 billion was strictly for equity acquisition, rejecting any suggestion that it was a financial bailout.
This clarification follows NNPCL’s earlier assertion that securing a $1 billion loan, backed by crude oil, was key to supporting the Dangote Refinery during liquidity challenges.
The claim was made by NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, during an energy stakeholders’ event on Monday.
