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The Nigerian National Petroleum Company Limited (NNPC Ltd) on Monday said a strategic decision to secure a $1 billion loan backed by its crude was instrumental in supporting the Dangote Refinery during liquidity challenges.
The $1 billion loan formed a part of the equity owned by the NNPC in the refinery.
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The move, according to the company, paved the way for the establishment of Nigeria’s first private refinery.
Olufemi Soneye, the chief corporate communications officer of NNPC Ltd, disclosed this while speaking at the energy relations stakeholder engagement held in Abuja on Monday.
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Although the NNPC initially had an equity of about 20 per cent in the refinery, it was subsequently reduced to 7.25 per cent.
Speaking at a press briefing at the refinery in July, the President of Dangote Group, Aliko Dangote, said NNPC Ltd owns only 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 in a statement at the time, the NNPC Ltd said its assessment of the investment portfolio led to the decline in its share of the refinery.
It explained that the interest, worth $2.76 billion, was financed by a forward sale agreement of $1.036 billion fromof which $1 billion was paid to Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (DPRP FZE).
“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,” the NNPC said.
The 650,000 barrels per day Dangote Petroleum Refinery, located on the outskirts of Lagos, was inaugurated recently amid expectations that it will address some of the issues affecting the sector.
Speaking on Monday, Mr Soneye explained that the initiative underscores NNPC’s dedication to fostering public-private partnerships that drive national development.
He said under the leadership of the Group’s Chief Executive Officer, Mele Kyari, NNPC Ltd has achieved several notable milestones, including the successful restart of the Port Harcourt Refinery, pioneering the adoption of Compressed Natural Gas (CNG), and reporting its first profit in decades, amongst others.
“In a historic achievement, NNPC, under Kyari’s leadership, declared profit for the first time in decades, marking a significant financial turnaround. NNPC Ltd has achieved groundbreaking milestones, redefining the trajectory of Nigeria’s oil and gas sector,” he said.
He added that the restart of the Port Harcourt Refinery marks a significant turning point in Nigeria’s quest for energy self-sufficiency, reaffirming the company’s commitment to revitalising the nation’s refining capacity.
“NNPC has also championed the adoption of Compressed Natural Gas (CNG) as an alternative energy source, offering Nigerians a cleaner and more cost-effective solution amidst rising global energy costs.
“A strategic decision to secure a $1 billion loan backed by NNPC’s crude was instrumental in supporting the Dangote Refinery during liquidity challenges, paving the way for the establishment of Nigeria’s first private refinery.
“This initiative underscores NNPC’s dedication to fostering public-private partnerships that drive national development,” Mr Soneye said.
Speaking further he said the company has already exceeded its profit projections for 2024.
Additionally, he said Mr Kyari facilitated the $3 billion Gazelle loan, a critical intervention that helped stabilise the federation during a challenging foreign exchange crisis.
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Mr Soneye assured that the company will continue to strengthen Nigeria’s energy sector while solidifying its legacy as a transformative force and a global game-changer.
He noted that energy relations are the backbone of NNPC Ltd’s operations and strategic aspirations as an integrated energy company.
“In a rapidly evolving global energy landscape, fostering strong relationships with stakeholders across the value chain is not just a priority but a necessity for achieving our objectives and ensuring energy for today and tomorrow,” he said.
