Page 7 - AfrOil Week 33 2021

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NIGERIA
NIGERIA’S Dangote Group has moved to dis- miss reports about a potential financial crisis at the company’s nearly complete refinery amid allegations that the developer is struggling to cope with servicing a $7bn credit.
The explosive report, published by local media network MMS Plus, quoted a contractor at the project who alleged that “poor planning, underpayment of contractors, and a lack of proper project management” had led to delays and a lack of clear decision-making resulting in “absolute chaos”. It said that the project’s debt would rise to $8.4bn by 2025.
Two days after publishing the story which suggested that the financial difficulties could see the refinery become the subject of a takeo- ver by the Assets Management Corporation of Nigeria (AMCON), MMS Plus reported that four police officers had entered the news agen- cy’s headquarters in Lagos, requesting access to the office of the editor-in-chief.
A day later though, both AMCON and Dan- gote rubbished the claims, pointing out that few
Block A1 is adjacent to the Sangomar block offshore Senegal (Image: African Petroleum Corp.)
It explained that the super-major had agreed to pay Gambia’s government all the money it was due to invest in exploration work at Block A1, as well as the balances still owed for training, resources and rentals. This is in line with the terms of the company’s licence, which states that the licensee must pay a settlement equal to the difference between its agreed work commitment and performed work commitment if it wishes to quit the project.
The statement did not reveal the size of the settlement. However, Offshore Energy reported earlier this week that the settlement was equiva- lent to around $29.3mn.
BP obtained its license for Block A1 in July 2019, about two years after the Ministry of Petroleum and Energy stripped exploration rights from Africa Petroleum, an affiliate of Nor- way’s Aker Energy, citing the company’s failure to uphold its investment commitments during a two-year exploration period. Like Aker, BP had
a two-year exploration licence. It did meet its obligations to acquire and re-process 2-D and 3-D seismic data from the block and conduct an environmental impact assessment (EIA) within that period, but it did not uphold its commit- ment to drilling an exploration well by July 29, 2021.
The company’s failure to meet this mile- stone came as no surprise. BP had announced in July 2020 that it did not intend to proceed with work at Block A1, owing to a change in its corporate strategy favouring low-carbon energy initiatives.
Subsequently, it began negotiations with Gambia’s government on meeting requirements for backing out of the project.
Block A1 was one of two licence areas taken from Aker Energy in 2017. The other is known as Block A4. Africa Petroleum contested the withdrawal of its licence and regained control over the asset in 2020, following a court battle.™
Dangote rubbishes refinery debt claims
The Dangote refinery will have a capacity of 650,000 bpd (File Photo)
projects of this scale can be completed without tapping debt markets. AMCON’s head of cor- porate communications, Jude Nwauzor said the report was inaccurate, adding that neither Dangote Refinery nor the Dangote Group is on its list of debtors.
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