The Nigerian National Petroleum Company (NNPC) Ltd has pledged 35,000 barrels of crude oil per day (bpd) as repayment for a loan of a $1.036 billion funding from Lekki Refinery Funding Limited.
The loan was for acquisition of a 20 percent stake in Dangote refinery for $2.76 billion. Of the $1.036 funding, $1 billion was paid to Dangote Refinery and $36 million was for transaction costs.
According to data from NNPC Ltd’s recently released audited financial report for 2022: “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.”
It further showed that apart from the 35,000 forward sale, the NNPC also has a 90,000 bpd oil-for-debt financing deal of $3.3 billion with Afreximbank.
To complete the $2.76 billion for the 20 per cent stake, NNPC Ltd 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 per cent of NNPC’s portion of any dividend declared by the refinery throughout the repayment period.
“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,” it added.
Meanwhile, other details of the audited report showed that the firm spent an estimated NN2.9 trillion on wages, entertainment, bank charges, running cost and others between September 2021 and December 2022, just as N1.2 trillion was spent on general and administrative charges for the 16 months period.
The report further showed that both NNPCL Group and the company spent a total of N872 billion on “other expenses” not clearly specified in the document.
While security expenses by the Group and the company stood at N532 billion, entertainment was N8.35 billion, employee benefit expenses, which include salaries, wages, allowances, pensions and gratuities, N373 billion and directors’ expenses N1.2 billion.
Office running costs gulped N1.8 billion, while management and facilitation fees took N295 million, donations N1.65 billion, and audit fees N2 billion while fines & penalties took N45 billion.
Other expenses include bank charges, N675 million; depreciation of other property, plants and equipment, N67.9 billion; depreciation of right of use asset, N1.3 billion; advertisement and publicity, N4.9 billion; legal and professional fees, N8.3 billion; printing and stationery, N57.5 billion; rents and rates, N35 billion; repairs and maintenance N219.9 billion; travelling and transport, N354.2 billion; minimum tax and levy, N15.65 billion, write-off of property, plant and equipment, N139.8 billion; postages and telephone, N3.46 billion among others.
