The Nigerian National Petroleum Corporation Limited has reduced its stake in the multi-billion dollar Dangote Refinery from the initial 20 percent to 7.2 percent.
The President/Chief Executive Officer of Dangote Petroleum Refinery, Aliko Dangote, said this in Lagos on Sunday during a media parley and facility tour by media executives.
He said NNPC’s stake dropped to 7.2% over the company’s failure to pay the balance of its share, which was due in June.
The NNPC had acquired a 20 percent interest in the $20bn Dangote refinery for $2.76 billion.
“NNPC no longer owns a 20 percent stake in the Dangote refinery. They were meant to pay their balance in June, but have yet to fulfill the obligations. Now, they only own a 7.2% stake in the refinery,” Dangote said.
The NNPC also confirmed the development in a statement late Sunday.
“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 the spokesman for the company, Olufemi Soneye.
Africa’s richest man also said that the refinery will also resume fertiliser production in two weeks.
He assured that the refinery is now set to roll out its petrol from August 2024, having resolved its crude oil supply issues through the help of the Nigeria National Petroleum Company Limited and the Federal Government.
He explained that the crude supply challenge, which affected the supply of petrol from the refinery, was resolved last week after the Federal Government intervened.
The journalists were on a guided tour of the refinery, which is located at the Lekki Free Trade Zone in Lagos.
Beyond resolving the crude supply issues and announcing plans to roll out petrol in August, Dangote also told journalists that the refinery’s fertiliser unit would resume production in two weeks.
This would give farmers more access to fertiliser for their farm products.
Dangote told over 70 journalists who were part of the refinery tour that there was a massive request for fertiliser from Nigerians and the rest of Africa, so his group had no choice but to respond positively.
Nigeria faces energy challenges, with all its state-owned refined 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 less 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.
Recently the Dangote Industries Limited raised an alarm over attempts by international oil companies to frustrate efforts at purchasing crude for the refinery.
“While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) are trying their best to allocate the crude for us, the IOCs are deliberately and willfully frustrating our efforts to buy the local crude,” the Vice President, Oil and Gas at DIL, Devakumar Edwin, told energy editors in June.
“It seems that the objective is to ensure that our Petroleum Refinery fails. It is either they are deliberately asking for ridiculous/humongous premium or, they simply state that crude is not available.
“At some point, we paid $6 over and above the market price. This has forced us to reduce our output as well as import crude from countries as far as the US, increasing our cost of production.”