Dangote Rejects NNPC’s Offer To Increase Stake In Refinery

The President of the Dangote Group, Aliko Dangote, has revealed that he rejected offer by the Nigerian National Petroleum Company (NNPC) Limited to increase its ownership in the Dangote Petroleum Refinery.

Dangote made this known on Wednesday during an interview with Nicolai Tangen, the Chief Executive Officer of Norway’s Sovereign Wealth Fund, monitored by Channels Television.

According to him, the decision was taken because the company plans to open up ownership of the refinery to more Nigerians through a future Initial Public Offering (IPO).

The NNPC bought a 7.25 percent stake in the refinery in 2021 for $1 billion.

The agreement also gave the state-owned oil company the option to purchase an additional 12.75 percent stake before June 2024.

However, Dangote disclosed that when the NNPC later tried to acquire more shares in the refinery, the request was declined.

He explained that the company preferred a wider ownership structure instead of allowing a single organisation to control a larger percentage.

Dangote also identified policy instability and the possibility of civil unrest as some of the biggest threats facing the refinery project.

Speaking during the interview, he said “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.”

Under the leadership of former NNPC Group Chief Executive Officer Mele Kyari, the company reduced its planned 20 percent stake in the refinery to 7.25 percent.

Dangote had earlier explained in 2024 that many Nigerians wrongly believed the NNPC owned 20 percent of the refinery, when in reality the company only completed payment for 7.2 percent ownership.

“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.

Former NNPC spokesman Olufemi Soneye had explained in 2024 that the company reduced its investment in the refinery so it could channel funds into compressed natural gas (CNG) projects.

Dangote also spoke about how the refinery project was financed.

According to him, the initial plan was to use mostly internally generated funds for construction, but the depreciation of the naira forced the company to seek additional financial support from banks and institutions.

He listed financial partners such as Afreximbank, Africa Finance Corporation, Zenith Bank, Access Bank, UBA, Standard Bank of South Africa, and Standard Chartered Bank of the United Kingdom among those that supported the project.

Dangote added that the refinery eventually exceeded the company’s original expectations after completion.

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