The Nigerian National Petroleum Company Limited (NNPCL) is to pay its pending $1.76 billion equity in Dangote Refinery with $2.5/barrel crude oil and dividend accruals.
The NNPCL disclosed that once the plant came on stream, which was initially for April 2023, it would begin the discounting of $2.5 for every barrel from the supply of 300,000 barrels per day to offset its remaining equity participation.
This is contained in NNPCL’s latest Audited Financial Statement (AFS) released on Friday, January 26.
“In September 2021, the NNPC acquired 20 per cent interest in Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (DPRP FZE) worth $2.76 billion. This investment is held by NNPC Greenfield (a special purpose vehicle that is 100 per cent owned by NNPC) in trust for NNPC.
“This acquisition was financed by a $1.036 billion funding of which $1 billion was paid to Dangote Refinery and $36 million accounting for transaction costs.
“The balance of the cost of equity investments made in DPRP FZE, which is $1.76 billion will be paid upon completion of the refinery project starting April 1, 2023 or any other date agreed between the parties, that is the NNPC and Dangote Oil Refining Company Limited.
“(This shall be done) via a combination of a $2.5/bbl discount on the official selling price per barrel on 300,000 barrels per day to DPRP FZE, and 100 per cent of NNPC’s portion of any dividend declared by DPRP FZE throughout the repayment period,” the report said .
However, it stated that it already entered into a forward sale agreement with Lekki Refinery Funding Limited, to supply 35,000 barrels of crude oil per day for the settlement of the $1.036 billion (N426.2 billion) funding already received for the financing of the investment in Dangote refinery.
“The interest rate for the facility is three-month libor plus 6.125 per cent. The arrangement has been scheduled to commence from August 30, 2023. Project Bison has been transferred to NNPC Limited,” the AFS highlighted.
Aside from the 35,000 forward sale for the repayment of the $1 billion part payment for the Dangote refinery, the NNPC also has a 90,000 bpd oil-for-debt financing deal of $3.3 billion with Afreximbank.
The increase in the overall performance of the NNPC, including the profit which it attributed to “owners of the company” and “non-controlling interest”, may also have been further enhanced by the recent decision to take the liability occasioned by the controversial fuel subsidy off its books after commercialisation.
