The Dangote Petroleum Refinery and Petrochemicals (DPRP) has refuted claims that the Nigerian National Petroleum Company Limited (NNPCL) provided a $1 billion loan through a crude forward sale agreement to address a liquidity crisis.
In a statement on Wednesday, DPRP’s Chief Branding and Communications Officer, Anthony Chiejina, dismissed the allegations, describing them as a distortion of facts.
“We would like to clarify that this is a misrepresentation of the situation as $1 billion is just about 5% of the investment that went into building the Dangote Refinery,” Chiejina stated.
According to him, the partnership with NNPCL was motivated by the company’s strategic importance as Nigeria’s largest crude offtaker and sole petrol supplier at the time.
The agreement involved the sale of a 20% stake in the refinery to NNPCL for $2.76 billion, with $1 billion to be paid upfront and the balance recovered over five years through crude oil deductions and dividends.
Chiejina explained that such terms would not have been offered if the refinery faced liquidity challenges.
He added that NNPCL failed to meet its obligation to supply 300,000 barrels of crude oil per day due to overcommitting its crude cargoes to financiers.
In response, the refinery extended a 12-month grace period for NNPCL to pay the outstanding equity balance in cash.
When the deadline expired on June 30, 2024, without payment, NNPCL’s equity share was reduced to 7.24%.
“These events have been widely reported by both parties,” Chiejina concluded.
