Chief Executive Officer (CEO) of the Dangote Refinery, Aliko Dangote, has said the Nigerian National Petroleum Company (NNPC) Limited made a big mistake by cutting its 20 per cent stake in the 650,000 barrels a day refinery.
Dangote stated this during an interview with Bloomberg TV in the United States on Monday.
Narrating how the agreements with NNPC were halted, he explained that the Dangote Group offered NNPC very favourable deals valued at about $2.79 billion, but the national oil company was unable to fulfill its obligations.
Dangote said NNPC opted out of two different arrangements they had initially proposed and ultimately decided to limit its investment to 7.2 per cent.
“We gave them a good deal. We structured an agreement with them. The deal was about $2.79 billion. The first part of the money was $1 billion which they paid us about a year and half ago.
“The balance of the money was split into two. One portion is that every crude they supplied to us then, we would deduct $2 and then up till the time they finish paying that one-third. The other one-third would have come out of their own profit.
“Later, NNPC opted out from the first agreement, saying it’s a little bit confusing. They wanted the agreement to be changed. They said they wanted to pay cash. So, we said okay, fine. We signed another agreement, cancelling the other one. The new agreement we signed was for them to pay us after one year.”
Continuing, Dangote said: “After one year, they will pay us the balance of $1.8 billion. The month for them to pay was June. But in June, they came back to us and said they’ve changed their mind.
“They want to remain at 7%. We said okay, fine. So, we left it. Now, we own the rest of the shares. They own only 7.2%. That’s what it is. I think they made a big mistake.”
When asked about the possibility of renegotiating with NNPC, Dangote stated that the deal is final and there is no turning back.
“There is no more negotiation with us. That agreement is finished. It’s dead. It’s completed. That’s where we are right now,” Dangote added.
