The Nigerian National Petroleum Company Limited (NNPCL) has paid back $625 million of the $1.036 billion borrowed to acquire a 20% share in the Dangote Oil Refinery.
As of December 31, 2023, a balance of $424 million remained. This repayment is an important component of NNPCL’s plan to establish a presence in the refinery located in Lagos’ Lekki Free Zone.
Lekki Refinery Funding Limited granted the loan at three-month LIBOR plus 6.125 percent. Initially, NNPC Greenfield Limited oversaw this investment.
However, after the Petroleum Industry Act reform, NNPCL’s Downstream Investment Service (NDIS) took over administration. This transition switched the payment method from a crude oil discount to direct cash payments.
NNPCL initially owned a 20% share, but presently owns only 7.25 percent due to failure to satisfy the full payment schedule. Aliko Dangote, the refinery’s owner, mentioned the reduced stake due to NNPCL’s late payments.
Femi Soneye, NNPC’s chief corporate communications officer, indicated that the share reduction was planned and communicated to Dangote several months in advance.
Despite its lesser ownership, NNPCL remains dedicated to its investment in the refinery, which will be Africa’s and the world’s largest single-train plant, with a capacity of 650,000 barrels per day. This investment is intended to enhance Nigeria’s energy sector and stabilize the economy.
