The Dangote Petroleum Refinery and Petrochemicals (DPRP) has dismissed allegations that the Nigerian National Petroleum Company Limited (NNPCL) provided $1 billion in loan support to address a liquidity crisis at the refinery.
In a statement issued on Wednesday, Anthony Chiejina, the Chief Branding and Communications Officer of the DPRP, described the claims as a distortion of the facts.
“We would like to clarify that this is a misrepresentation of the situation as $1bn is just about 5% of the investment that went into building the Dangote Refinery,” Chiejina stated.
Chiejina explained that the partnership with NNPCL was driven by their critical role as the largest offtaker of Nigerian crude and, at the time, the sole supplier of petrol in Nigeria.
“We agreed on the sale of a 20% stake at a value of $2.76 billion. Of this, we agreed that they will only pay $1 billion while the balance will be recovered over a period of 5 years through deductions on crude oil that they supply to us and from dividends due to them,” he noted.
The spokesperson emphasized that the generous payment terms were incompatible with claims of a liquidity crisis.
“If we were struggling with liquidity challenges, we wouldn’t have given them such generous payment terms. As of 2021 when the agreement was signed, the refinery was at the pre-commission stage,” he added.
Chiejina disclosed that NNPCL failed to deliver the agreed supply of 300,000 barrels per day (bpd) of crude due to prior commitments with financiers and unachieved production expectations.
“We subsequently gave them a 12-month period for them to pay cash for the balance of their equity given their inability to supply the agreed crude oil volume,” he said.
When the June 30, 2024 deadline elapsed without payment, the refinery revised NNPCL’s equity share from 20% to 7.24%.
“NNPCL failed to meet this deadline which expired on June 30th, 2024. As a result, their equity share was revised down to 7.24%. These events have been widely reported by both parties,” Chiejina concluded.
