Aliko Dangote, chairman of Dangote Refinery, has said that the Nigerian National Petroleum Corporation (NNPC) Limited only owns a 7.2% share in his Refinery.
He disclosed this during a press briefing at the refinery in Lagos on Sunday, where he said that the NNPC now owns only 7.2% instead of 20% of the refinery due to its failure to pay the balance of their share, which was due in June. He stated that while the NNPC had promised to provide the funds, it has been unable to meet its obligations, thus reducing its stake in the $19 billion refinery to 7.2%.
“NNPC no longer owns a 20% 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% stake in the refinery,” Dangote said.
In August 2021, the NNPC Ltd, with the approval of former President Muhammadu Buhari, acquired a 20 per cent stake in the Dangote refinery for $2.76 billion. The deal also stated that the national oil company supplies 300,000 barrels of crude per day to the refinery while taking a loan of $3.3 billion from Afrexim Bank to be paid back with crude.
But in January this year, the global Extractive Industry Transparency Initiative (EITI) raised concerns over NNPC Limited’s 20 per cent share in the refinery, adding that many questions are left unanswered in other crude-backed loans. EITI, Technical Director, Alex Gordy, said the terms of the contracts remain elusive.
In 2019, NNPC had joined the EITI supporting company while becoming a member of the EITI’s state-owned enterprise (SOE) transparency network. The decision was meant to make NNPC, frequently accused of lacking in transparency and accountability, much more open.
Gordy said the public deserves to know the various conditions surrounding the contracts, adding that issues around interest, repayment, valuation and others need to be clear.
Meanwhile, it has been reported that the refinery is ramping up production for the supply of Premium Motor Spirit (PMS), commonly known as petrol, this month as sales of product is expected to circulate the local market in August.
This is contained in the company’s projection report which indicates that the refinery will start producing PMS this month, with sales to local distributors commencing in August.
Initially, it was reported that the refinery will operate at 500,000 barrels per day (bpd), equating to about 15 cargoes monthly. It aims to reach its full capacity of 650,000 bpd by the first quarter of 2025.
“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 Aug, 550kbpd by end of the year, and 650kbpd by Q1 2025 Gasoline production to commence in July with sales from August,” the report shows.
At the media briefing, Dangote also announced plans to list the fertilizer and petrochemical business of the refinery in the first quarter of 2025.
