The Chief Executive Officer of the Dangote Refinery, Aliko Dangote has criticized the Nigerian National Petroleum Company’s decision to back out of its plan to acquire a 20% stake in the refinery, calling it “a big mistake.”
He emphasized the potential benefits of collaboration and the importance of strategic partnerships in driving the country’s economic growth.
Dangote made this disclosure during an interview with Bloomberg TV in the U.S. on Monday.
Dangote explained that the agreements with NNPC were initially set in motion, but negotiations stalled due to changes in priorities and strategic direction within the company.
Dangote mentioned that the Dangote Group had proposed favorable deals to NNPC, valued at approximately $2.79 billion.
However, he pointed out that the national oil company was unable to meet its obligations under these agreements, which contributed to the breakdown of their collaboration.
According to him, NNPC withdrew from two initial arrangements they had proposed and ultimately chose to limit its investment to just 7.2%.
“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 that for them to pay us after one year.
“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 ok, 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,” Dangote said.
When questioned about the possibility of renegotiating with NNPC, Dangote stated that the deal is final and that 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.
It was had previously reported in July that Aliko Dangote announced that the Nigerian National Petroleum Corporation Limited no longer holds a 20% stake in the refinery.
“The agreement was actually 20% which we had with NNPC and they did not pay the balance of the money up till last year and then we gave them another extension up till June (2024) and they said that they would remain where they have already paid which is 7.2%. So NNPC, the government (sic) owns only 7.2% not 20%.” Dangote stated.
