The Nigerian National Petroleum Company (NNPC) Ltd has acquired a 20% stake in Dangote refinery for $2.76 billion through a $1.036 funding from Lekki Refinery Funding Limited of which $1 billion was paid to Dangote Refinery and $36 million was for transaction costs.
Data sourced from NNPC Ltd’s newly released audited financial report for 2022 showed the state-owned company pledged 35,000 barrels of crude oil per day (bpd) as repayment for the loan.
The NNPC 2022 audited statement read:
- “In September 2021, the NNPC 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 a three-month LIBOR plus 6.125 per cent. The arrangement has been scheduled to commence on August 30, 2023. Project Bison has been transferred to NNPC Limited.”
Aside from this 35,000 forward sale, the NNPC also has a 90,000 bpd oil-for-debt financing deal of $3.3 billion with Afreximbank.
NNPC to complete payment to Dangote via discount, dividend
To complete the $2.76 billion for the 20% stake, the NNPC agreed to give Dangote Refinery a $2.5/bbl discount on the official selling price per barrel on 300,000 barrels per day and 100% of NNPC’s portion of any dividend declared by the refinery throughout the repayment period.
The statement read:
- “In September 2021, the NNPC acquired a 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 (the NNPC and Dangote Oil Refining Company Limited) 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.”
NNPC records N8.81 trillion in revenue in 2022
The Nigerian National Petroleum Company Limited (NNPCL) increased its revenue by 37.2%, from N6.42 trillion in 2021 to N8.81 trillion in 2022.
Also, the company recorded Profit After Tax (PAT) of N2.52 trillion, representing about a 274% increase when compared to the N674 billion it recorded in 2021.
The audited statement for 2022 also showed that the NNPC had total non-current assets of N37 trillion and current assets of N21.59 trillion, to give a total of N58.65 trillion in assets. It meant an increase of about 260.47% compared to N16.27 trillion in 2021.
Also, non-current liabilities stood at N19.98 trillion, while current liabilities were N29.3 trillion, which translates to a total of N49.35 trillion in liabilities at the end of 2022.
This shows an increase of about 266.6% from the previous year, as N13.46 trillion was recorded in 2021.
In addition, deferred tax liabilities were N13.23 trillion during the year, while deferred tax assets were N3.098 trillion. The cost of sales climbed to N6.7 trillion in 2022, showing a 25.47% increase from N5.34 trillion in 2021.
The financial statement is a sign of progress for NNPC over the years, especially in the area of profit. In 2018, the NNPCL recorded a loss of N803 billion, while in 2019, the loss was reduced to N1.7 billion by the company.
The NNPCL turned the corner in 2020 when it recorded a profit of N287 billion for the first time in its history. By 2021, the profit jumped to N674.1 billion.
