Dangote Refinery, NNPCL resume fight over $1bn loan

According to him, it is inaccurate to say NNPCL facilitated
$1 billion for Dangote Refinery amid liquidity challenges.

Chijiena explained that NNPCL had proposed a 20 percent
stake investment valued at $2.76 billion in the Dangote Refinery, but that
didn’t materialise.

He noted that NNPCL was able to invest $1 billion, which
amounts to 7.24 percent equity value.

“Our decision to enter into a partnership with NNPCL was
based on recognition of their strategic position in the industry as the largest
offtaker of Nigerian crude and, at the time, the sole supplier of gasoline into
Nigeria.

“We agreed on the sale of a 20 percent 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.

“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. In addition, if we were struggling with liquidity
issues, this agreement would have been cash-based rather than credit-driven.

“Unfortunately, NNPCL was later unable to supply the agreed
300 thousand barrels a day of crude, given that they had committed a greater
part of their crude cargoes to financiers with the expectation of higher
production, which they were unable to achieve.

“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.

“NNPCL failed to meet this deadline, which expired on June
30th, 2024. As a result, their equity share was revised down to 7.24 percent.
These events have been widely reported by both parties.

“It is, therefore, inaccurate to claim that NNPCL
facilitated a $1 billion investment amid liquidity challenges.

“Like all business partners, NNPCL invested $1 billion in
the refinery to acquire an ownership stake of 7.24 percent. That is beneficial
to its interests,” the Dangote Group statement said.

Earlier, in September 2024, Dangote Refinery and NNPCL
locked horns over petrol pricing.