The Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery are in a contentious dispute over a $1 billion loan.
NNPCL claims the loan, secured by crude oil, was vital for assisting the refinery during financial difficulties.
Conversely, Dangote Refinery counters this, asserting that the $1 billion was an investment for acquiring a 7.24% stake in the refinery, not for liquidity support.
The conflict traces back to a 2021 agreement, where NNPCL was to acquire a 20% equity stake in the refinery, valued at $2.76 billion. NNPCL initially paid $1 billion, with the remainder to be offset over five years via crude oil deductions and dividends.
However, NNPCL’s failure to provide the agreed 300,000 barrels per day of crude oil led to a reduction of their equity stake to 7.24%.
Dangote Refinery clarified that the partnership was credit-based rather than cash-based and stated that the refinery did not face liquidity challenges at the agreement’s inception.
The refinery also pointed out that the favorable payment terms extended to NNPC indicated that they were not in a precarious financial state.
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