NNPC Yet to Make $1.76bn Payment for Dangote Refinery Stake

The Nigerian National Petroleum Corporation (NNPC) has yet to pay the sum of $1.76 billion (N746.433 billion) to Dangote Refinery due in part for the 20% stake it purchased in the refinery.

In Dangote Industries Limited Full Year 2021 financial statements seen by MoneyCentral the firm reported under other receivables: “the sum of $1.760 Billion (N746.433 billion) (2020: nil) receivable from NNPC on the purchase of 20% Dangote Oil Refining Company (DORC) shares in Dangote Petroleum Refinery and Petrochemical (DPRP) FZE.”

Nigeria’s Nigerian National Petroleum Corporation is expected to supply 300,000 b/d of crude to the 650,000 b/d Dangote oil refinery.

“We will have a right to 20% of production from this facility. We structured our equity participation on the basis that the refinery must buy at least 300,000 b/d of crude oil of our production,” Mele Kyari, NNPC Group Managing Director (GMD) said.

Kyari said last year that the NNPC was planning to borrow to actualise its agenda of acquiring a 20 per cent stake in Dangote Refinery.

He said some financial institutions had already agreed to fund the acquisition, while the debts would be paid back from the NNPC’s earnings from dividends and profits accruing from its investment in the fuel plant.

Kyari stated that all the borrowing institutions, including Afrexim Bank, were comfortable with the deal.

Last year, Dangote Oil Refining Ltd disposed 20% ordinary shares of 200,000 units of 1,000,000 total units in Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise to NNPC valued at $2.76 billion.

Dangote refinery is a 650,000 barrels per day (BPD) integrated refinery and petrochemical project under construction in the Lekki Free Zone in Lagos, Nigeria.

It is owned by the Dangote Group and is expected to be Africa’s biggest oil refinery and the world’s biggest single-train facility, upon completion.

The integrated refinery and petrochemical project which will meet 100% of Nigeria’s refined petroleum product requirement and even have a surplus for export when completed is expected to be completed in 2023 after some delays and will generate 9,500 direct and 25,000 indirect jobs.

It is designed to produce up to 50 million litres of petrol and 15 million litres of diesel a day, roughly 10.4 million tonnes of the product, 4.6 million tonnes of diesel, and 4 million tonnes of jet fuel per year, in addition to having a fertiliser plant, which will utilise the refinery by-products as raw materials.