Aliko Dangote, the richest man in Africa, has revealed that the Nigerian National Petroleum Company (NNPC) Limited now owns a 7.2% stake in the Dangote Petroleum Refinery, instead of the 20% that was originally announced prior to the facility’s inauguration at the Lekki Free Trade Zone.
Dangote revealed this information at a press briefing on Sunday, citing the company’s inability to pay the remaining share balance that was due in June. The NNPC had paid $2.76 billion to acquire a 20% interest in the $20 billion Dangote refinery.
“NNPC no longer owns a 20 per cent stake in the Dangote refinery. They were met to pay their balance in June, but have yet to fulfil the obligations. Now, they only own a 7.2% stake in the refinery,” Dangote said.
The NNPC confirmed the development in a statement late Sunday. “NNPC Limited periodically assesses its investment portfolio to ensure alignment with the company’s strategic goals,” said a spokesman for the company.
“The decision to cap its equity participation at the paid-up sum was made and communicated to Dangote Refinery several months ago,” said Olufemi Soneye.
A cocktail of issues.
Nigeria, Africa’s most populous country, is facing energy issues, with all of its state-owned refineries not operating. The country relies significantly on imported refined petroleum products, with the state-owned NNPC being the primary importer of these critical commodities.
Fuel lineups are prevalent in the country. Petrol prices have tripled since the termination of subsidies in May 2023, exacerbating the plight of inhabitants who rely on petrol to operate their vehicles and generate electricity, owing to decades of erratic power delivery.
Last December, Dangote, one of Africa’s premier industrialists, began operations at his $20 billion complex in Lagos, producing 350,000 barrels per day. The refinery aims to reach its maximum capacity of 650,000 barrels per day by the end of the year. The refinery has begun to sell diesel and aviation fuel to the country’s marketers, with petrol supplies expected to begin in August.
Dangote had expressed dissatisfaction with acquiring Nigerian crude for his facilities. According to Bloomberg, the Lagos-based refinery imported over 24 million barrels of petroleum from the United States.
The NNPC reportedly pledged Nigerian crude in a $3.3 billion oil-for-loan Afreximbank transaction, limiting local crude supply. Nigeria’s crude oil production increased to 1.276 million barrels per day (bpd) in June, significantly lower than the 1.7 million bpd target set in the 2024 Budget.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, had in May indicated the decision by the Lagos-based refinery to import US crude might 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.