In a recent development, Aliko Dangote, CEO of Dangote Refinery, announced that the Nigerian National Petroleum Corporation (NNPC) Limited no longer holds a 20% stake in the Dangote Refinery. This revelation came during a press briefing at the refinery, shedding light on significant changes in ownership due to financial obligations not being met by the NNPC.
According to Dangote, the NNPC now owns only 7.2% of the refinery. This reduction in stake is attributed to the NNPC’s failure to pay the balance of their share, which was due in June. Despite promises to provide the necessary funds, the NNPC has been unable to fulfill its financial commitments, resulting in a decreased ownership percentage in the $19 billion refinery project.
“NNPC no longer owns a 20% 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 stated.
In March 2021, Nairametrics reported that the NNPC planned to raise $2.76 billion in credit to purchase a 20% stake in the Dangote refinery. This move was part of the government’s strategy to secure Nigeria’s energy security by collaborating with private oil companies while also working on rehabilitating its own refineries. Data from NNPC Ltd’s 2022 audited financial report revealed that the national oil company borrowed $1.3 billion to acquire the stake. However, Dangote clarified that the NNPC has only paid enough to acquire a 7.2% share and failed to meet the remaining obligations due last month.
What You Should Know About the Dangote Refinery
The Dangote Refinery, located in the Lekki Free Zone, Lagos, Nigeria, is a colossal oil project owned by the Dangote Group. With a capacity of 650,000 barrels per day (BPD), it aims to become Africa’s largest oil refinery and the world’s biggest single-train facility. The refinery is expected to generate 9,500 direct jobs and an additional 25,000 indirect jobs, providing a substantial economic boost to the region.
Once fully operational, the refinery will produce approximately 50 million liters of petrol and 15 million liters of diesel daily, equating to 10.4 million tonnes of petroleum products annually. It will also yield 4.6 million tonnes of diesel and 4 million tonnes of jet fuel per year. Moreover, the facility includes a fertilizer plant that will utilize by-products from the refinery as raw materials, further enhancing its economic and environmental impact.
Implications and Future Outlook
The reduction of the NNPC’s stake in the Dangote Refinery highlights the financial challenges and strategic shifts within Nigeria’s oil sector. This change in ownership dynamics may influence the future operations and collaborations between the NNPC and private entities like the Dangote Group.
As the refinery moves closer to becoming fully operational, its impact on Nigeria’s economy and energy security will be closely watched. The success of the Dangote Refinery is crucial for reducing Nigeria’s dependency on imported petroleum products and for boosting the nation’s refining capacity.
In conclusion, the reduction of the NNPC’s stake in the Dangote Refinery marks a significant shift in Nigeria’s oil industry landscape. As this massive project progresses, its contributions to the country’s economic growth and energy security will be pivotal.