Business

Your information on $1bn investment misleading, Dangote Refinery replies NNPCL

Published

2 days ago

December 19, 2024

Your information on $1bn investment misleading, Dangote Refinery replies NNPCL

The Dangote Petroleum Refinery has addressed what it calls inaccurate and misleading information from the Nigerian National Petroleum Company Limited (NNPCL) regarding the details of a $1bn investment in its operations.

The refinery clarified that the claim misrepresented the facts, potentially misleading stakeholders and the public about the scope and nature of the investment.

In a statement issued on Wednesday by the Group Chief Branding and Communications Officer, Anthony Chiejina, the refinery explained that the $1bn crude-backed loan facilitated by NNPCL represents only five percent of the total investment used to build the 650,000 barrels-per-day refinery.

Earlier, at a stakeholders’ engagement meeting on Monday, NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, disclosed that the national oil company had secured the $1bn loan, emphasizing that it underscored NNPCL’s commitment to fostering public-private partnerships for economic growth.

However, Dangote Refinery dismissed this narrative, labeling it as “misinformation.” The company stressed that while the crude-backed loan supported the refinery’s operations, it is inaccurate to portray NNPCL as a key facilitator of the refinery’s financing, particularly amid liquidity challenges.

The statement titled, “Addressing NNPCL’s Misinformation”, read, “We have received numerous inquiries from the media and other concerned stakeholders seeking clarification on a recent report attributed to the Nigerian National Petroleum Company Limited that their decision to secure a $1bn loan backed by its crude was instrumental in supporting the Dangote refinery during liquidity challenges.

“We would like to clarify that this is a misrepresentation of the situation as $1bn is just about 5 per cent of the investment that went into building the Dangote Refinery.”

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Chijiena also explained that NNPCL had proposed a 20 per cent stake investment valued at $2.76bn in the Dangote Refinery in 2021, but that didn’t materialise due to the inability of the NNPCL to supply the agreed 300,000 barrels a day of crude.

He also noted that NNPCL was able to invest $1bn, which amounts to a 7.24 per cent equity value.

The statement continued, “Our decision to enter into a partnership with NNPCL was based on recognition of their strategic position in the industry as the largest offtake of Nigerian crude and, at the time, the sole supplier of gasoline into Nigeria.

“We agreed on the sale of a 20 per cent stake at a value of $2.76bn. Of this, we agreed that they will only pay $1bn while the balance will be recovered over a period of five years through deductions on crude oil that they supply to us and from dividends due to them. If we were struggling with liquidity challenges, we wouldn’t have given them such generous payment terms.

“As of 2021, when the agreement was signed, the refinery was at the pre-commission stage. In addition, if we were struggling with liquidity issues, this agreement would have been cash-based rather than credit-driven.

“Unfortunately, NNPCL was later unable to supply the agreed 300,000 barrels a day of crude given that they had committed a greater part of their crude cargoes to financiers with the expectation of higher production which they were unable to achieve.”

It added that 12 months of grace was provided for the national oil firm to fulfil its obligations, which were still not met, hence a downgrade of its equity share to 7.5 per cent.

He explained, “We subsequently gave them 12 months to pay cash for the balance of their equity given their inability to supply the agreed crude oil volume. NNPCL failed to meet this deadline which expired on June 30th, 2024. As a result, their equity share was revised down to 7.24 per cent. These events have been widely reported by both parties.

“It is, therefore, inaccurate to claim that NNPCL facilitated a $1bn investment amid liquidity challenges. Like all business partners, NNPCL invested, $1bn in the Refinery to acquire an ownership stake of 7.24 per cent stake which is beneficial to its interests.

“NNPCL remains our valued partner in progress, and it is imperative for all stakeholders to adhere to the facts and present the narrative in the correct context, to guide the media in reporting accurately for the benefit of our stakeholders and the public.”

Your information on $1bn investment misleading, Dangote Refinery replies NNPCL

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CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

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1 day ago

December 20, 2024

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CBN Governor, Olayemi Cardoso

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

The Central Bank of Nigeria (CBN) has granted Bureau de Change (BDC) operators temporary permission to purchase up to $25,000 weekly in foreign exchange (FX) from the Nigerian Foreign Exchange Market (NFEM).

This move, detailed in a circular dated December 19, 2024, is designed to meet seasonal retail demand for FX during the holiday period.

The circular was signed by T.G. Allu, on behalf of the Acting Director of the Trade and Exchange Department.

The arrangement will be in effect from December 19, 2024, to January 30, 2025.

Under the directive, BDCs may purchase FX from a single Authorized Dealer of their choice, provided they fully fund their accounts before accessing the market.

Transactions to occur at the prevailing NFEM rate

The transactions will occur at the prevailing NFEM rate, and BDCs are required to adhere to a maximum 1% spread when pricing FX for retail end-users.

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All transactions conducted under this scheme must be reported to the CBN’s Trade and Exchange Department.

The circular read in part:

“In order to meet expected seasonal demand for foreign exchange, the CBN is allowing a temporary access for all existing BDCs to the NFEM for the purchase of FX from Authorised Dealers, subject to a weekly cap of USD 25,000.00 (Twenty-five thousand dollars only).

This window will be open between December 19, 2024 to January 30, 2025.

“BDC operators can purchase FX under this arrangement from only one Authorized Dealer of their choice and will be required to fully fund their account before accessing the market at the prevailing NFEM rate. All transactions with BDCs should be reported to the Trade and Exchange department, and a maximum spread of 1% is allowed on the pricing offered by BDCs to retail end-users.”

The CBN assured the general public that PTA (Personal Travel Allowance) and BTA (Business Travel Allowance) remain available through banks for legitimate travel and business needs.”

These transactions are to be conducted at “market-determined exchange rates” within the NFEM framework.

This initiative reflects the CBN’s strategy to stabilize the FX market and manage seasonal surges in demand.

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

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Bitcoin price crashes to $95,000

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December 20, 2024

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Bitcoin price crashes to $95,000

The cryptocurrency market experienced sharp declines after the United States Federal Reserve announced a 25-basis point rate cut.

Bitcoin’s price dropped from its record high of $108,267 to a multi-day low of $95,000 within 36 hours.

Amid this turmoil, Paper-hand traders are rushing to sell their assets while the experienced ones are taking advantage of the dip to increase their portfolios.

Bitcoin price drops after Federal Reserve announces rate cut

Bitcoin experienced a sharp decline after the Federal Reserve cut interest rates by 25 basis points for the third time this year.

The announcement led to Bitcoin’s price falling to a multi-day low of $95,000, marking a $13,000 drop within 36 hours.
This pullback followed a recent record high of $108,268 earlier in the week.
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“Today was a closer call, but we decided it was the right move,” Powell said during a press conference. While rate cuts typically benefit cryptocurrencies due to their risky asset status, this decision appears to have introduced caution among buyers.

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Crypto analysts predict that Bitcoin could face increased volatility in the short term. On-chain data reveals selling pressure has eased since November, but caution remains high. Buyers are closely monitoring Bitcoin’s support levels, particularly around the $100,000 mark, with potential resistance seen at $110,000 in the coming weeks.

Some buyers anticipate a “Santa Rally” a term used to describe the Bullish performance of bitcoin during the Christmas holidays. Historical data on this notion has given mixed outcomes.

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However, analysts warn that current market conditions, including macroeconomic uncertainty and a cautious Fed, could dampen such expectations.

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Aside from the federal rate cuts announced by Powell. He also mentioned that the Central Bank is not allowed to hold Bitcoin unless approved by Congress.

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Dangote reduces petrol price to ₦899.50/litre

Published

2 days ago

December 19, 2024

Trends Admin

Dangote Refinery

Dangote reduces petrol price to ₦899.50/litre

Dangote Petroleum Refinery has slashed the price of its petrol t to ₦899.50 per litre.

Making this known in a statement on Thursday was Anthony Chiejina, Chief Branding and Communications Officer of the Dangote Group.

He said, “Africa’s first privately-owned oil refinery, which previously lowered the price to N970 per litre on November 24, has now announced a new price of N899.50 per litre. This reduction is designed to ease transport costs during the festive period.”

Adding, Chiejina said, “In addition to the holiday discount, Dangote Petroleum Refinery is allowing consumers to purchase an additional litre of fuel on credit for every litre bought on a cash basis.”

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“To alleviate transport costs during this holiday season, Dangote Refinery is offering a holiday discount on PMS. From today, our petrol will be available at N899.50 per litre at our truck loading gantry or SPM. Furthermore, for every litre purchased on a cash basis, consumers will have the opportunity to buy another litre on credit, backed by a bank guarantee from Access Bank, First Bank, or Zenith Bank.”

The statement said the refinery was committed to making sure Nigerians have access to premium quality petroleum products that are competitively priced which are also environmentally and engine friendly.