Aliko Dangote, CEO of Dangote Group, recently sparked controversy with surprising revelations regarding the Nigerian National Petroleum Company (NNPC)’s stake in the Dangote Refinery. Contrary to previous expectations, NNPC now holds only a 7.2% stake in the $19 billion project, significantly lower than the anticipated 20%.
The reduction in NNPC’s stake raises critical questions about the circumstances and implications behind this development. Dangote clarified that NNPC’s diminished share resulted from their failure to meet financial obligations due in June, underscoring a shift in the refinery’s ownership structure.
Originally, NNPC had planned to secure a 20% stake in the refinery through a $2.76 billion credit facility in 2021. This strategic move was intended to enhance Nigeria’s participation in crucial energy projects while supporting domestic refinery initiatives.
Mustapha Yakubu, Chief Operating Officer of Refining and Petrochemicals, emphasized the government’s commitment to collaborate with private oil entities to bolster national energy security, without compromising efforts to rehabilitate local refineries.
Recent financial disclosures from NNPC revealed that their acquisition of the refinery stake was financed through significant debt, amounting to approximately $1.3 billion. However, according to Dangote, this amount only secured NNPC’s current 7.2% stake, highlighting unresolved financial commitments.
The evolving dynamics surrounding NNPC’s investment in the Dangote Refinery underscore broader implications for Nigeria’s energy sector and its strategic alliances with private enterprises.
