Business

Reasons NNPC Adjusts Investing in Dangote Refinery

Published by Tope Fakinlede on July 15th, 2024.

Reasons NNPC Adjusts Investing in Dangote Refinery

NNPC

The Nigerian National Petroleum Corporation (NNPC) has addressed recent reports indicating a reduction in its stake in the Dangote Refinery from 20% to 7.2%.

On Sunday, Aliko Dangote, Chief Executive Officer of Dangote Group, announced at a press conference in Lagos that NNPC’s stake in the refinery had decreased due to the Corporation’s failure to meet its financial commitments.

Dangote stated, “NNPC no longer holds a 20% stake in the Dangote Refinery. Due to their inability to fulfill their financial obligations, their ownership has been adjusted to 7.2%.”

“We initially welcomed NNPC as a key partner in this critical venture. However, the delay in their payments has necessitated this adjustment in the ownership structure,” he added.

In March 2021, NNPC announced plans to invest over $2.7 billion for a 20% stake in the refinery but ultimately paid $1.3 billion.

Responding to the situation, NNPC revealed that the decision to limit its investment was made months ago, as the investment did not align with their strategic objectives. Olufemi Soneye, NNPC’s Chief Corporate Communications Officer, stated:

“NNPC Limited periodically assesses its investment portfolio to ensure alignment with the company’s strategic goals. The decision to cap its equity participation in the Dangote Refinery was made several months ago.”