Dangote Stake Shows NNPC Funds Better Spent Outside Old Refineries

The rising value of the Nigerian National Petroleum Company Limited’s (NNPCL) stake in the Dangote Petroleum Refinery has drawn attention to how investment decisions can produce better results than years of spending on underperforming assets.

Reports show that NNPC’s investment in the refinery has appreciated to about $2.84 billion. The development comes after decades of heavy spending on the country’s government-owned refineries in Port Harcourt, Warri and Kaduna, which have remained largely inactive despite repeated rehabilitation efforts.

Industry stakeholders say the latest figures provide a clear example of how strategic investments can create value while reducing pressure on public resources.

Billions spent with little result

For nearly 30 years, NNPCL committed large amounts of money to maintaining and reviving Nigeria’s three state-owned refineries. Several turnaround maintenance projects were carried out, but the facilities continued to struggle to operate at expected levels.

Recent estimates indicate that about N3.2 trillion was spent on the refineries without delivering the desired outcome. The situation has raised concerns about the long-term viability of government-owned refining operations and the effectiveness of repeated rehabilitation programmes.

Analysts note that the value of NNPC’s investment in the Dangote Refinery stands in contrast to the poor returns recorded from years of spending on the older facilities.

They argue that the development shows the importance of directing capital toward projects that have stronger prospects for performance and growth.

Partnership model gains attention

NNPCL entered the Dangote Refinery project in 2021 after the Federal Executive Council approved the acquisition of a 20 per cent equity stake valued at $2.76 billion.

Under the agreement, the national oil company was to pay $1 billion in cash, while the remaining balance of about $1.76 billion would be settled through crude oil supply over time.

Since beginning operations, the Dangote Petroleum Refinery has become a major supplier of refined petroleum products to local and international markets. Its operations have also helped reduce Nigeria’s dependence on imported fuel.

Industry observers maintain that the appreciation of NNPC’s stake to $2.84 billion demonstrates the benefits of collaboration between the public and private sectors.

They believe the refinery’s continued expansion and growing market reach could further strengthen its contribution to Nigeria’s energy security and economic growth while reinforcing the value of carefully targeted investments in the oil and gas sector.