NNPC Has Only 7.2% Stake in Dangote Refinery, Says Aliko Dangote

Contrary to widely held notion that Nigerian National Petroleum Company Limited (NNPC) had a 20 percent stake in Dangote Refinery and Petrochemicals, President of Dangote Group, Alhaji Aliko Dangote, on Sunday, revealed that the national oil company owned only 7.2 percent of the asset.

Dangote, Africa’s richest man, made the disclosure while responding to questions from editors and media executives during a tour of the 650, O00 barrels per day (bpd) refinery. 

Chief Corporate Communications Officer, NNPC, Olufemi Soneye, explained that NNPC “made a commercial decision to cap our investment at the amount already paid,” which amounted to the 7.2 per cent stake.

Dangote Refinery also has 838 KTPA polypropylene plant, covers an area of approximately 2,635 hectares, and is located in the Dangote Industries Free Zone, lbeju-Lekki, Lagos. 

Dangote stated, “The agreement we had with the NNPC was actually 20 percent, but they didn’t pay the balance of the money as at last year. Then we gave them another extension up till June this year, but they later said they would remain with what they have already paid, which is 7.2 percent.

“So, NNPC and the government own only 7.2 per cent of the refinery. For me that is okay.”

He also said Dangote Refinery, which recently added Brazilian crude to its feedstock, would in the coming days start purchasing crude from African producers, in a bid to ramp up capacity.

 Speaking on the challenges of setting up a refinery, Dangote stressed that when he ventured into the project, “We didn’t know the magnitude of what we were getting into. That was why I said in a recent interview that if I knew what I was getting into, I wouldn’t have started it at all.

“Right from the beginning, we launched 31 projects concurrently and this one (the refinery) alone is enough to give somebody grey hair.

“But we are in the middle of the sea, and so no going back. If we stop, that means we would sink and the only option is just to continue, no matter how tired you are. I didn’t want to write a book, but for the first time I am going to write a book about my experience with project execution in Africa.

“That is because in Africa, it is totally different from overseas. Here, there is no infrastructure. As you can see, after we have battled with fixing our own infrastructure, now we have to go and start building roads.

“But what gives me joy is the self-sufficiency and the jobs we are creating and also we are creating a circular economy.”

Dangote stressed the need for policy consistency by government at all levels to encourage investors in the country, just as he urged the federal government to focus more on domestic investors.

He stated, “We have a lot of gas-related projects in the pipeline, but it depends on the government. I am sure you have seen the challenges that we faced in terms of crude supply. But crude supply has been sorted out now by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

“The NUPRC has actually given out the guidelines and what we expect now is the operation of the guidelines and I hope the international oil companies (IOCs) would respect the guidelines because it is in the Petroleum Industry Act.”

According to Dangote, the refinery was designed in a way, “in case people try to squeeze us, because in the oil market there are too many sharks and anybody may just want to make money from somebody without working hard.”

The billionaire also revealed plans to list Dangote Refinery and Petrochemicals Limited and the Dangote Fertiliser Plant on the Nigerian Exchange Limited in the first quarter of 2025.

He said, “We are targeting end of this year and worst case we should be able to list them by the end of the first quarter of next year, so that we can sell shares to Nigerians. That is what we are planning.”

Earlier, in a presentation, Dangote said Dangote Group expected to grow its revenues six times to about $30 billion by 2025, from $5.4 billion in 2022. The group was also targeting that 15 per cent of the revenue would come from its cement business; 50 per cent of its EBITDA from outside Nigeria (including exports), and 70 per cent of revenue from foreign exchange.

Dangote said, “Our export strategy is driven by our passion to ameliorate the foreign exchange pressure in the economy. We have the capacity to export eight million tons of clinker from our two terminals.

“What we are trying to do is to totally get ourselves out of the demand of foreign exchange from the Central Bank of Nigeria and be the biggest supplier of foreign exchange in the foreign exchange market.”

He added, “We are ranked consistently as top tax payer in the country annually. We are committed to complying with all relevant tax laws and regulations.

“We are known as one of the largest employers of labour. However, we are also conscious of ensuring our workers enjoy a good living standard. This is reflected in our inclusion in the list of top paying firms in the country.

The Dangote Petroleum Refinery is an industrial plant that transforms crude oil into various usable petroleum products, such as diesel, gasoline (petrol), jet fuel, and kerosene.  The refinery produces Euro-V quality gasoline and 5 diesel, as well as jet fuel and polypropylene.

The refinery is designed to process large variety of crude, including many of the African crudes, some of the Middle Eastern crudes, and the US Light Tight 0il.  

Dangote Petroleum Refinery is said to have the capacity to meet 100 per cent of Nigeria’s requirements of all liquid petroleum products (gasoline, diesel, kerosene and aviation jet) and have surplus of each of these products for export.

The refinery was designed to use the latest technology to comply with stringent guidelines and regulations to protect the local environment and at the same time produce the latest environmentally-friendly petroleum products for worldwide markets

Dangote Refinery has its own dedicated steam and power generation system with adequate standby units for reliable/uninterrupted utility supply to operating plants. 

 In addition, it has a 435MW power plant that can meet the total power requirement of lbadan Distribution Company, covering five states, including Oyo, Ogun, Osun, Kwara, and Ekiti.

The petrochemical plant was designed to produce 77 different high-performance grades of polypropylene.  It maximises value addition – extracts maximum value from every barrel of crude and minimises low-value fuel oil.

The refinery is estimated to generate an annual market value of $21 billion for Nigerian crude oil; foreign exchange savings/earnings of $9.9 billion, and ensures over $25 billion addition to the country’s Gross Domestic Product, through massive value addition within the country.

Obinna Chima

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