Dangote Refinery Refutes Claims of $1 Billion Loan as Liquidity Support from NNPCL

ALIKO DANGOTE

The Dangote Refinery has dismissed reports suggesting that the Nigerian National Petroleum Company Limited (NNPCL) secured a $1 billion loan backed by crude oil to support the refinery during liquidity challenges. 

In a statement released by Anthony Chiejina, Group Chief Branding and Communications Officer, the company clarified that the reported $1 billion loan was misrepresented and did not reflect the full context of their partnership with NNPCL.

According to Chiejina, the $1 billion represents only about 5% of the total investment in the refinery, which NNPCL paid as part of a $2.76 billion agreement to acquire a 20% stake in the project. 

The remaining balance was structured to be recovered over five years through deductions from crude oil supplies and dividends.

“If we were struggling with liquidity challenges, we wouldn't have agreed to such generous payment terms or credit-driven arrangements,” Chiejina noted, adding that the agreement was signed in 2021 when the refinery was at the pre-commissioning stage.

However, NNPCL was unable to meet its commitment to supply 300,000 barrels of crude oil per day due to prior engagements with financiers and lower-than-expected production levels. 

Consequently, the company was given a 12-month deadline, which expired on June 30, 2024, to pay the balance in cash. Following its inability to meet this obligation, NNPCL's equity share in the refinery was reduced to 7.24%.

The statement emphasized that NNPCL's $1 billion investment was part of a business agreement to acquire a stake in the refinery and not a loan to address liquidity issues. 

“It is imperative for all stakeholders to adhere to the facts and present the narrative in the correct context,” Chiejina stressed, reaffirming NNPCL as a valued partner in progress.

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