Aliko Dangote, founder and president/chief executive of the Dangote Group, said he rejected a request from the Nigerian National Petroleum Company Limited (NNPC Ltd) to increase its 7.2 per cent stake in the Dangote Petroleum Refinery.
Mr Dangote disclosed this in an interview with the Chief Executive Officer of the Norwegian Sovereign Wealth Fund, Nicolai Tangen, on Wednesday.
Responding to a question on the risks to his businesses, Mr Dangote said the biggest risk is government inconsistencies in policies, noting that the company is addressing the issue.
“Actually, if there are civil wars, which is not in the offing at all. The other biggest risk is government inconsistencies in policies, and we are addressing that one because if you look at our refinery, the national oil company already owns 7.25 per cent, and they are trying to buy more. We are the ones that said no; we want to now spread it and have everybody be part of it,” Punch quoted Mr Dangote as saying.
In June 2024, the NNPC Ltd said it now owns a 7.2 per cent stake in the 650,000 barrels per day Dangote refinery.
At the time, the oil firm made this known in reaction to a statement by Mr Dangote that NNPC no longer owns a 20 per cent stake in the refinery.
Speaking at a press briefing at the refinery at the time, Mr Dangote said NNPC Ltd now owns only a 7.2 per cent stake in the refinery due to its failure to pay the balance of its share, which was due in June.
Confirming the development at the time, the NNPC Ltd said its period assessment of the investment portfolio led to the decline in its share of the refinery.
The NNPC Ltd, in its 2023 audited financial statement, said in September 2021, it proposed to acquire a 20 per cent interest in Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (DPRP FZE).
READ ALSO: Dangote Refinery’s domestic petrol supply rose in April – NMDPRA
It explained that the interest, worth $2.76 billion, was financed by a forward sale agreement of $1.036 billion from Lekki Refinery Funding Limited, of which $1 billion was paid to DPRP FZE.
This investment, it said, was initially held by NNPC Greenfield Limited (a special purpose vehicle 100 per cent owned by NNPC) in trust for NNPC Limited.
“Due to the restructuring of the NNPC Limited Post Petroleum Industry Act (PIA) era, the function of this unit has been moved to NNPC Downstream Investment Service (NDIS).
“The balance of the cost of equity investments made in DPRP FZE, which is USD1.76 billion, has been agreed to be paid in cash instead of the proposed crude discount of $2.5/bbl on the official selling price of crude oil. As at 31 December 2023, NNPC Limited holds a 7.25 per cent interest in DPRP FZE,” the NNPC Ltd said in its report.
Apparently, NNPC Ltd was unable to make the cash payment and thus stuck to owning only a 7.2 per cent stake in the refinery.
