The move was confirmed by the NNPC in a statement, which stated that it evaluated its investment portfolio to be in line with its objectives.
The Nigerian National Petroleum Company (NNPC) Limited reportedly has a 7.2% share in the Dangote Petroleum Refinery, not the 20% that was first disclosed before to the facility’s opening in the Lekki Free Trade Zone, according to Africa’s richest man, Aliko Dangote.
At a press conference on Sunday, Dangote revealed this and added that NNPC’s ownership had fallen to 7.2% as a result of the company’s inability to pay the outstanding share amount that was due in June. For $2.76 billion, the NNPC purchased a 20% stake in the $20 billion Dangote refinery.
“NNPC’s twenty percent ownership in the Dangote refinery has been relinquished. They were given until June to pay the remaining amount, but they still haven’t fulfilled their duties. They currently only hold 7.2% of the refinery, according to Dangote.
Late on Sunday, the NNPC released a statement confirming the development. According to a corporate spokesperson, “NNPC Limited periodically assesses its investment portfolio to ensure alignment with the company’s strategic goals.”
“The decision to cap its equity participation at the paid-up sum was made and communicated to Dangote Refinery several months ago,” said Olufemi Soneye.
A Cocktail Of Issues
Nigeria, Africa’s most populous nation, faces energy challenges, with all its state-owned refineries non-operational. The country is heavily reliant on imported refined petroleum products, with the state-run NNPC being the major importer of the essential commodities.
Fuel queues are commonplace in the country. Prices of petrol tripled since the removal of subsidy in May 2023, compounding the woes of the citizens who power their vehicles, and generating sets with petrol, no thanks to decades-long epileptic electricity supply.
Last December, Dangote, one of Africa’s leading industrialists, commenced operations at his $20bn facility sited in Lagos with 350,000 barrels a day. The refinery hopes to achieve its full capacity of 650,000 barrels per day by the end of the year. The refinery has begun the supply of diesel and aviation fuel to marketers in the country while petrol supply is expected to commence in August.
Dangote had expressed frustration about getting Nigerian crude for his facility. A Bloomberg report had it that the Lagos-based refinery bought about 24 million barrels of crude from the United States.
The NNPC had reportedly pledged Nigerian crude in a $3.3 billion oil-for-loan Afreximbank deal, hampering its local crude supply. Nigeria’s crude oil production rose to 1.276 million barrels per day (bpd) in June, way lesser than the 1.7 million bpd benchmark in the 2024 Budget.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, had in May said the decision by the Lagos-based refinery to import US crude could be based on its business model.
But Dangote disclosed on Sunday that his refinery would roll out petrol from August 2024, having resolved its crude oil supply issues with the NNPC and the Federal Government.
