The management of Dangote Refinery has denied claims by the Nigerian National Petroleum Company Limited (NNPCL) that it provided a $1 billion loan to support the refinery during liquidity challenges. According to Dangote, the claim is a misrepresentation of the situation, as the $1 billion investment represents only about five percent of the total investment in the refinery.

In a statement, Anthony Chiejina, Group Chief Branding and Communications Officer of Dangote, explained that the partnership with NNPCL was based on the company’s strategic position in the industry as the largest offtaker of Nigerian crude and sole supplier of gasoline into Nigeria.

Chiejina stated, “We agreed on the sale of a 20% stake at a value of $2.76 billion. Of this, we agreed that they will only pay $1 billion while the balance will be recovered over a period of five years through deductions on crude oil that they supply to us and from dividends due to them.”

He emphasized that if Dangote was struggling with liquidity challenges, they wouldn’t have given NNPCL such generous payment terms. 

Chiejina also noted that as of 2021, when the agreement was signed, the refinery was at the pre-commission stage, and the agreement would have been cash-based rather than credit-driven if there were liquidity issues.

Dangote also revealed that NNPCL failed to supply the agreed 300,000 barrels of crude per day, leading to a revision of their equity share from 20% to 7.24% after the June 30, 2024 deadline for cash payment expired.

Chiejina stressed, “It is, therefore, inaccurate to claim that NNPCL facilitated a $1 billion investment amid liquidity challenges. “Like all business partners, NNPCL invested $1 billion in the refinery to acquire an ownership stake of 7.24% that is beneficial to its interests.”