By Aduragbemi Omiyale

The management of Dangote Refinery has picked a hole in the claims by the Nigerian National Petroleum Company (NNPC) Limited that it supported the business with a $1 billion loan when it was undergoing a liquidity crisis.

In a statement on Wednesday night, the private oil refinery believed to be worth about $20 billion said the claims by the NNPC were not true.

In the disclosure made available to Business Post, the Group Chief Branding and Communications Officer of Dangote, Mr Anthony Chiejina, said, “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.”

“Our decision to enter into a partnership with NNPCL was based on recognition of their strategic position in the industry as the largest off-taker 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 $2.76 billion. Of this, we agreed that they will only pay $1 billion while the balance will be recovered over a period of 5 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 thousand 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.

“We subsequently gave them a 12-month period for them 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 $1 billion investment amid liquidity challenges. Like all business partners, NNPCL invested, $1 billion in the Refinery to acquire an ownership stake of 7.24 per cent stake that is beneficial to its interests,” he explained.

Mr Chiejina noted that, “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.”

By Adedapo Adesanya

Nigeria has finally approved a $1.3 billion deal by Renaissance to buy Shell Plc’s onshore assets after it was initially rejected in October 2o24.

The Minister of Petroleum Resources (Oil), Mr Heineken Lokpobiri, is allowing Renaissance Africa Energy’s purchase of the assets, the group said in a statement Wednesday.

Business Post reported earlier that the deal may get approval soon following the announcement of Shell’s $5 billion investment in the Bonga North project, which reportedly used the final investment decision (FID) as a pavement for the approval of the sale of its onshore and shallow water assets to the consortium.

In October, the chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr Gbenga Komolafe, revealed that while the government had processed five divestment applications, only four were approved – leaving out Shell’s asset sale to Renaissance, a consortium made up of four indigenous companies including Aradel Holdings, ND Western, First Exploration and Production (E&P) and WalterSmith as well as the international energy group, Petrolin.

These assets, initially at $2.4 billion and now at $1.3 billion, include an estimated 6.73 billion barrels of crude oil and condensate, along with 56.27 trillion cubic feet of gas.

The FG rejected the transaction because the consortium did not have the financial, experiential, and technical capacities to take over the assets.

The takeover will see Shell exit its Niger Delta operations and focus on its gas and upstream business, which it hopes will continue to drive cash generation into the next decade.

By Adedapo Adesanya

The Senate has passed the 2014 Nigerian Insurance Industry Reform Bill, following the adoption of the report by the Committee on Banking, Insurance, and Other Financial Institutions.

The report was presented by the committee’s chairman, Mr Adetokunbo Abiru during the plenary session on Tuesday.

The bill is awaiting assent by President Bola Tinubu to become codified and executed as a law.

Mr Abiru explained that the bill, which was read a second time on July 18, sought to consolidate various existing laws regulating insurance businesses in Nigeria.

He listed the relevant laws to include the Insurance Act 2003, the Marine Insurance Act, the Motor Vehicles Third Party Insurance Act, the National Insurance Corporation Act, and the Nigerian Reinsurance Corporation Act.

A major objective of the bill, according to the lawmaker, is to create a robust legal and regulatory framework for the insurance sector, enabling it to contribute positively to Nigeria’s financial landscape.

He emphasised the need for effective risk-based supervision in the insurance sector, arguing that the current rule-based regulatory system had become obsolete.

The former chief executive of Polaris Bank noted that stakeholders, during the public hearing, widely supported the bill, highlighting that existing laws no longer meet the evolving needs of the industry.

“The current insurance legislation is over two decades old and lacks provisions to address contemporary challenges and foster growth and innovation,” he said.

He also pointed out that legal obsolescence had led to regulatory inefficiencies, hampering the industry’s global competitiveness.

Mr Abiru urged the Senate to pass the bill, which would provide a comprehensive framework for the regulation of all types of insurance initiatives in Nigeria.

His colleague, Mr Jimoh Ibrahim raised concerns about the proposed minimum capital requirement of N45 billion for reinsurance businesses, suggesting the status quo should be maintained due to the current economic situation.

He highlighted that the passage of the bill was necessary to align the insurance ecosystem with contemporary economic realities, which would ultimately benefit the country.

“This Act, once it receives concurrence from the House of Representatives and assent from the President, will significantly contribute to shaping our economy for the better.

“Economies are dynamic and constantly changing, so it is incumbent upon the authorities of every nation to update their legislation to align with contemporary realities.

“This is precisely what the passage of this legislation aims to achieve to restructure the entire insurance ecosystem in line with current realities.

“I am confident that the country will benefit greatly when the law is eventually assented to.”