The Nigerian National Petroleum Company Limited (NNPC Ltd) has provided clarification regarding its decision to decrease its ownership in the Dangote Refinery.

In its audited financial report for 2023, NNPC Ltd indicated that in September 2021, it had proposed to acquire a 20 percent stake in Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (DPRP FZE).

This investment, valued at $2.76 billion, was financed through a forward sale agreement amounting to $1.036 billion with Lekki Refinery Funding Limited, of which $1 billion was allocated to Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (DPRP FZE).

Initially, this investment was managed by NNPC Greenfield Limited, a special purpose vehicle entirely owned by NNPC, on behalf of NNPC Limited.

Following the restructuring of NNPC Limited in the post-PIA era, the responsibilities of this unit were transferred to NNPC Downstream Investment Service (NDIS).

The remaining equity investment cost in DPRP FZE, totaling $1.76 billion, has been agreed to be settled in cash rather than through the previously proposed crude discount of $2.5 per barrel on the official selling price of crude oil.

As of December 31, 2023, NNPC Limited holds a 7.25 percent interest in DPRP FZE, as stated in the report. It appears that NNPC Ltd was unable to fulfill the cash payment, resulting in its retention of only a 7.2 percent stake in the refinery.

Last month, NNPC Ltd confirmed that it currently possesses a 7.2 percent interest in the Dangote refinery, which has a capacity of 650,000 barrels per day.

The oil company announced this in response to remarks made by Aliko Dangote, the President of Dangote Group, indicating that NNPC no longer holds a 20 percent interest in the Dangote refinery.

During a press conference held at the refinery, Mr. Dangote stated that NNPC Ltd currently possesses only a 7.2 percent stake in the refinery, attributed to its inability to settle the remaining balance of its shares, which was due in June.

In a statement confirming this situation, NNPC Ltd explained that its recent evaluation of the investment portfolio resulted in a reduction of its stake in the refinery.

The Dangote Petroleum Refinery, with a capacity of 650,000 barrels per day, began producing diesel and aviation fuel in January.

The company has also taken steps towards initiating the production of refined petroleum products by receiving an additional one million barrels of Bonny light crude from NNPC Ltd. In April, the company started distributing petroleum products to the domestic market.