Dangote Calls NNPC’s Decision to Abandon Refinery Investment a ‘Big Mistake’

Aliko Dangote, the Chief Executive Officer of Dangote Refinery, has criticised the Nigerian National Petroleum Company (NNPC) Limited for pulling out of the original agreement to acquire a 20% stake in his refinery, labelling the move as “a big mistake.”

Speaking during an interview with Bloomberg TV in the United States on Monday, Dangote explained how the proposed partnership with NNPC came to an end.

He revealed that the Dangote Group had extended highly favourable offers to NNPC, amounting to approximately $2.79 billion, but the state-run oil company failed to meet its commitments.

According to him, NNPC opted out of two different arrangements they had initially proposed and ultimately decided to limit its investment to 7.2 percent.

He said: “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.”

Dangote said the NNPC wanted to pay cash, which led to signing 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 percent. We said ok, fine. So we left it. Now, we own the rest of the shares. They own only 7.2 percent. That’s what it is. I think they made a big mistake,” Dangote said.

When asked about the possibility of renegotiating with NNPC, Dangote said 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.”