Olufemi Soneye, the spokesperson for the Nigerian National Petroleum Company Limited (NNPC), disclosed that the state-owned energy company reduced its stake in the Dangote refinery to focus on investing in Compressed Natural Gas (CNG) initiatives.
Soneye explained that NNPC decided to limit its stake to 7.2% rather than the initially planned 20% to fund the construction of CNG stations across the country.
During his appearance on Berekete Family Radio, a video of which was reviewed by our correspondent on Monday, Soneye addressed allegations suggesting that NNPC, in collaboration with the Nigerian Midstream and Downstream Regulatory Commission, was attempting to undermine the Dangote refinery.
He dismissed these claims, emphasizing that NNPC would not sabotage a company in which it holds a 7.2% stake.
Soneye highlighted that NNPC recognized CNG as a more affordable and viable energy alternative for Nigerians, especially during the ongoing energy transition. He noted that fueling vehicles with CNG could cost Nigerians as little as N10,000, which is much cheaper than using petrol.
“The reason for reducing our stake in the Dangote refinery is to allocate more resources to CNG investments.
We observed that CNG is significantly cheaper, and globally, there is a shift towards clean and affordable alternative energy sources. That’s why NNPC is establishing CNG stations nationwide. We realized that gas is cheaper in Nigeria, so why not invest in it?” Soneye stated.
Regarding the sabotage allegations, Soneye reassured the public, saying, “We want all Nigerians to understand that NNPCL has no conflict with the Dangote refinery.
We are part owners of the refinery and have no interest in seeing it fail. We have invested billions of naira into it, holding a 7.2% stake. Why would we sabotage a company we are invested in?”
He also clarified that Farouk Ahmed, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, was speaking in his capacity as a regulator overseeing all operators in the midstream and downstream sectors, including NNPC.
“Mr. Farouk Ahmed is the head of Nigeria’s midstream and downstream petroleum regulatory authorities. They oversee all refineries and manage anything related to fuel distribution. They are, in fact, superior to NNPC in this sector. We have no issues with them,” Soneye emphasized.
In 2021, NNPC acquired a 7.25% stake in the Dangote refinery for $1.0 billion, with the option to purchase the remaining 12.75% stake by June 2024. However, the national oil company has since decided not to pursue the additional stake.
In July, Dangote Group President Alhaji Aliko Dangote confirmed that NNPC’s stake in the refinery was limited to 7.2% and not the originally agreed 20%.
“The agreement was initially for 20% with NNPC, but they did not complete the payment until last year. We then gave them an extension until June 2024, but they chose to retain their existing 7.2% stake. So, NNPC only owns 7.2%, not 20%,” Dangote stated.
Meanwhile, former Minister of Education Oby Ezekwesili called for an independent audit to determine why NNPC capped its investment in the Dangote refinery at 7.2% instead of 20%.
“Did the Nigerian government not inform us that it borrowed $3.3 billion from Afrieximbank to secure a stake in the Dangote refinery?” Ezekwesili questioned.
She urged President Bola Tinubu to immediately initiate an independent audit of the Dangote refinery-NNPC transaction to provide the public with a clear understanding of the situation.
Recently, Fitch Ratings, a credit rating agency, reported that the Dangote refinery plans to sell the remaining 12.7% stake that was initially intended for NNPC this year to service loans.
