NNPC repays 60% of loan obtained to acquire stake in Dangote refinery

The Nigerian National Petroleum Company (NNPC) Limited says it has repaid 60 percent of the $1.03 billion loan secured to finance its stake acquisition in the Dangote Petroleum Refinery and Petrochemicals (DPRP).

According to its audited financial statements for the fiscal year ending December 31, 2023, NNPC said the company has paid $625 million so far.

In September 2021, NNPC proposed to acquire a 20 percent interest in the Dangote refinery for $2.76 billion.

According to the energy company, the deal was financed by a forward sale agreement of $1.036 billion from Lekki Refinery Funding Limited, of which $1 billion was paid to Dangote refinery. 

NNPC said it entered into the forward sale agreement with Lekki Refinery Funding to supply 35,000 barrels of crude oil per day for the settlement “of the $1.036 billion (N426.2 billion) funding received for the financing of investment in Dangote Refinery”.

“The interest rate for the facility is 3-month libor plus 6.125%. As at 31st December 2023, NNPC limited has paid $625 million principal, while $424 million (N324 Billion) is still outstanding,” NNPC said.

The national oil company said the investment was initially held by NNPC Greenfield Limited, a special-purpose vehicle (SPV) 100 percent owned by the national oil company.

“Due to restructuring of the NNPC Limited Post PIA era, the function of this unit has been moved to NNPC Downstream Investment Service (NDIS),” the report reads.

“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 a $2.5/bbl on the official selling price of crude oil.”

However, on July 14, Aliko Dangote, founder of Dangote refinery, said NNPC no longer owns 20 percent stake in the refiner.

The businessman said NNPC now owns 7.2 percent of the refinery over failure to pay the balance of their share, which was due in June.

However, on August 13, NNPC said its stake in the Dangote refinery was reduced to 7.2 percent to invest in compressed natural gas (CNG).