The ?angote Group has refuted the recent claim by the Nigerian National Petroleum Company Limited (NNPCL) that its $1 billion investment aided the ?angote Refinery pull through its liquidity challenges.
Chief Branding and Communications officer of the ?angote Group, Anthony Chiejina, made this clarification in an issued statement to newsmen yesterday.
NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, had stated that the company secured a $1 billion loan, backed by crude oil, to support the ?angote Refinery during liquidity challenges.
Soneye, who addressed energy relations stakeholder engagement in Abuja on Monday, explained that the initiative underscored NNPCs dedication to fostering public-private partnerships that drive national development and pave way for the establishment of Nigerias first private refinery.
However, Chiejina said that the decision to enter into a partnership with NNPCL was based on recognition of their strategic position in the industry as the largest offtaker of Nigerian crude and at the time, the sole supplier of gasoline into Nigeria. He noted that the $1 billion was just about 5% of the investment that went into building the ?angote Refinery.
He said: We agreed on the sale of a 20% stake, at a value of $2.76 billion. Of this, we agreed that they (NNPCL) will only pay $1 billion while the balance will be recovered over a period of five years through deductions on crude oil that they supply to us, and from dividends due to them. If we were struggling with liquidity challenges, we wouldnt have given them such generous payment terms.
“As of 2021 when the agreement was signed, the refinery was at the pre-commission stage. In addition, if we were struggling with liquidity issues, this agreement would have been cash-based rather than credit-driven. Unfortunately, NNPCL was later unable to supply the agreed 300,000 barrels a day of crude, given that they had committed a greater part of their crude cargoes to financiers with the expectation of higher production, which they were unable to achieve.
We subsequently gave them a 12-month period for them to pay cash for the balance of their equity given their inability to supply the agreed crude oil volume. NNPCL failed to meet this deadline which expired on June 30, 2024. As a result, their equity share was revised down to 7.24 percent. These events have been widely reported by both parties.
He stated that it was, therefore, inaccurate to claim that NNPCL facilitated a $1 billion investment amid liquidity challenges, adding that like all business partners, NNPCL invested $1 billion in the refinery to acquire an ownership stake of 7.24 percent stake that is beneficial to its interests.
NNPCL remains our valued partner in progress, and it is imperative for all stakeholders to adhere to the facts and present the narrative in the correct context, to guide the media in reporting accurately for the benefit of our stakeholders and the public, he added.
