The President of the Dangote Group, Alhaji Aliko Dangote, on Wednesday said that the group turned down requests by the Nigerian National Petroleum Company (NNPC) Limited to increase its stake in the Dangote Petroleum Refinery. In an interview with the Chief Executive Officer of the Norwegian Sovereign Wealth Fund, Nicolai Tangen, monitored by Channels Television, Dangote explained that the NNPC’s offer was rejected because the company wants to give other Nigerians the opportunity to own shares in the plant, as the Group plans an initial IPO for the Refinery.
In 2021, the NNPC acquired the 7.25 per cent stake in the refinery for $1bn, with an option to acquire the remaining 12.75 per cent stake by June 2024. During the interview with Tangen, Dangote revealed that the national oil company had attempted to acquire more stakes in the refinery, but the offer was turned down.
The Industrialist also said civil war and government policy inconsistencies are the Refinery’s biggest risks. “The other biggest risk is government inconsistencies in policies, and we are addressing that one because if you look at our refinery, the national oil company already owns 7.25 per cent, and they are trying to buy more.
We are the ones that said no; we want to now spread it and have everybody be part of it.” The state oil firm, under the former Group Chief Executive Officer, Mele Kyari, reduced its stake in the refinery from 20 per cent to 7.25 per cent. Aliko Dangote made this public in 2024.
He disclosed that the NNPC had only a 7.2 per cent stake in the refinery and not 20 per cent as many Nigerians believed. “The agreement was actually 20 per cent, which we had with NNPC, and they did not pay the balance of the money up until last year; then we gave them another extension up until June (2024), and they said that they would remain where they had already paid, which is 7.2 per cent.
So NNPC owns only 7.2 per cent, not 20 per cent,” Dangote stated in 2024, to the surprise of many Nigerians. While defending why the NNPC reduced its planned stake in the Dangote refinery in 2024, the NNPC’s former spokesman, Olufemi Soneye, said it was to invest in compressed natural gas stations.
To raise funds for building the refinery, Dangote said he got a lot of support from various financial institutions, including Nigerian banks. According to him, the initial plan was to fund most of the construction work “from our internally generated funds”, but because of naira devaluation, the group “had to rely on Afreximbank, Africa Finance Corporation, Zenith Bank, Access Bank, UBA and a couple of the local banks, but of course we also have a very good relationship with the Standard Bank of South Africa and, at the beginning, Standard Chartered Bank of the UK”.
He maintained that the company was lucky and what happened when the plant was completed “turned out to be much more than our own expectations”.