NNPC reduces stake in Dangote refinery over unpaid balance

The Nigerian National Petroleum Corporation Limited (NNPC) has reduced its ownership stake in the Dangote Refinery from 20 percent to 7.2 percent due to its failure to complete payment for the remaining share, according to Aliko Dangote, CEO of the refinery.

In a press briefing held in Lagos State on Sunday, Dangote disclosed that NNPC missed the deadline to settle the outstanding balance for their 20 percent stake by June, leading to the reduction in their ownership.

“NNPC no longer holds a 20 percent stake in the Dangote Refinery. They were supposed to complete their payment in June but have not fulfilled their obligations. Consequently, their ownership in the refinery has been reduced to 7.2 percent,” Dangote clarified.

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NNPC had initially acquired the 20 percent stake in September 2021 for $2.76 billion, with an initial payment of $1 billion facilitated through funding from Lekki Refinery Funding Limited.

The remainder was intended to be financed through a $2.5 per barrel discount on 300,000 barrels of crude oil supplied daily to the refinery, as well as 100 percent of NNPC’s share of any dividends declared by the refinery.

In response to inquiries, NNPC confirmed the reduction in its stake through a statement released on Sunday. NNPC spokesperson Olufemi Soneye explained that the decision to cap their investment at the amount already paid was made several months ago and communicated to Dangote Refinery.

“Several months ago, NNPC Ltd made a commercial decision to limit our investment to the amount already paid. This decision was based on our internal assessment and has no immediate impact on our operational activities. NNPC periodically reviews its investment portfolio to ensure alignment with our strategic objectives,” Soneye clarified.