The Nigerian National Petroleum Company Limited (NNPCL) has successfully repaid part of the loan it took to to finance the acquisition of a 20% stake in the Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (DPRP FZE).
The company has paid 60% of a $1.036 billion loan that it took in September 2021. The nation’s oil company, repaid $625 million of the principal amount as at September 2023, leaving an outstanding balance of $424 million on the principal loan amount.
The source of this loan and the details of the repayment are documented in the NNPCL’s financial statement for the year ended December 31, 2023, under the section titled “Financing of investment in Dangote Refinery.”
The loan was secured through a forward sale agreement with Lekki Refinery Funding Limited, with an interest rate of 3-month LIBOR plus 6.125%.
A part of the financial statement read: “In September 2021, NNPC entered into a forward sale agreement with Lekki Refinery Funding Limited to supply 35,000 bbl. 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 of 31st December 2023, NNPC limited has paid $625 million principal, while $424 million (N324 billion) is still outstanding.”
This investment, was formally managed by NNPC Greenfield Limited, a special-purpose vehicle wholly owned by NNPC. However, the management of this investment was transferred to NNPC Downstream Investment Service (NDIS), following the restructuring of NNPC under the Petroleum Industry Act (PIA).
The restructuring also led to a significant change in the payment structure. The balance of the cost of equity investments, amounting to $1.76 billion, was agreed to be paid in cash instead of the originally proposed crude oil discount of $2.5 per barrel on the official selling price of crude oil.
As of December 31, 2023, NNPC Limited holds a 7.25% interest in DPRP FZE.
Reports earlier this year, have shown that the 2022 audited financial statement of NNPC contained information which showed that it had acquired a 20% stake in the Dangote refinery for $2.76 billion.
However, Aliko Dangote mentioned to newsmen that NNPC no longer holds a 20% stake in the refinery. He explained that this change occurred because NNPCL failed to pay the balance of their share, which was due in June.
NNPC in a statement through its Chief Corporate Communications Officer, Femi Soneye, explained why it holds only a 7.2% equity in the $19 billion Dangote Refinery, instead of the widely speculated 20%.
