Dangote Refinery Denies $1 Billion Loan From NNPCL

Dangote Refinery PLC  has dismissed reports claiming that a $1 billion loan from the Nigerian National Petroleum Company Limited (NNPCL) was crucial in resolving its liquidity issues.

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EKO HOT BLOG reports that in a statement by its Group Chief Branding and Communications Officer, Anthony Chiejina, the refinery clarified that the $1 billion, representing only 5% of the total investment in the facility, was part of a strategic partnership agreement, not a bailout.

The statement emphasized that the partnership was founded on NNPCL’s strategic position as Nigeria’s largest crude off-taker and gasoline supplier, rather than financial necessity.

“We agreed on the sale of a 20% stake at $2.76 billion, of which NNPCL would pay $1 billion upfront, while the balance would be recovered over five years through deductions on crude supply and dividends,” Chiejina explained.

He further noted that the refinery’s decision to offer NNPCL flexible payment terms indicated a strong financial position, as the agreement was structured on credit rather than cash.

Chiejina also addressed NNPCL’s failure to meet its supply obligations of 300,000 barrels of crude per day, attributing it to the company’s overcommitment of crude cargoes to financiers.

Despite being granted a 12-month period to pay the remaining balance for its equity stake, NNPCL missed the deadline, which expired on June 30, 2024. Consequently, its equity share was revised from 20% to 7.24%.

“It is inaccurate to claim that NNPCL facilitated a $1 billion investment due to liquidity challenges. Their investment secured a 7.24% equity stake, aligned with their interests as a business partner,” Chiejina clarified.

Dangote Loan NNPCL

The refinery reiterated NNPCL’s status as a valued partner, urging all stakeholders and the media to adhere to the facts for accurate reporting.

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