LAGOS – Nigerian state-owned oil firm NNPC shareholding in Dangote refinery has been whittled down to 7.2% from 20% after failing to pay the balance of funding owed, Aliko Dangote, the refinery’s owner told the BusinessDay newspaper.
NNPC has decided to cap its shareholding at 7.2%, which it has paid for and was communicated to the Dangote refinery, NNPC spokesperson Olufemi Soneye said in a statement.
NNPC, which is in talks over another oil-backed loan to boost its finances, agreed three years ago to buy shares for $2.7 billion in the 650,000 barrels per day refinery.
But Dangote told reporters during a briefing at the plant on the outskirts of Lagos on Sunday that NNPC failed to meet its part of the deal, the BusinessDay newspaper reported.
“NNPC no longer owns a 20% stake in the Dangote refinery. They were to pay their balance in June, but have yet to fulfil the obligations. Now, they only own a 7.2% stake in the refinery,” Dangote was quoted as saying.
However, on Monday, the NNPC rebutted claims by the Africa’s richest man that it failed to meet its payment obligations to increase its stake in his mega refinery to 20% from 7.2%, according to Bloomberg report.
“As a company, NNPC Ltd. periodically assesses its investment portfolio to ensure alignment with our strategic goals,” Nigeria National Petroleum Co. said Monday by text message. “The decision to cap our equity participation in the Dangote Refinery was made several months ago, and we informed the Dangote Refinery at that time,” it said.
NNPC is grappling with growing debt owed to gasoline suppliers, while the cost of gasoline subsidies has further depleted its cash reserves.
The national oil company previously agreed to buy the 20% stake in the refinery and pay for it with large amounts of crude. According to the company’s most recent financial statements, the NNPC committed 335 000 barrels a day to acquire the stake.
Known supplies of Nigerian barrels in December and January were well below that flow rate, although those deliveries were still when the plant was in the earlier stages of ramping up, according to data from traders compiled by Bloomberg.
The Dangote refinery has struggled to secure enough crude supplies locally because Nigeria’s production is constrained by lack of investment, pipeline vandalism and crude theft.
That has forced the refinery to import U.S. crude to reach its full capacity next year.
Dangote said he expected the refinery and a fertiliser plant, which is in the same complex, to be listed on the Nigerian stock exchange in the first quarter of 2025.
A senior company executive said in May the refinery aimed for a dual listing on the London and Lagos bourses.
Despite being Africa’s largest crude producer, Nigeria currently imports almost all its petroleum products because its refineries have been largely non-operational for decades. The Dangote Refinery is expected to end that.
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