By Milcah Tanimu
Aliko Dangote, CEO of Dangote Refinery, has termed the Nigerian National Petroleum Company (NNPC) Limited’s decision to withdraw from acquiring a 20% stake in his refinery as “a big mistake.” In an interview with Bloomberg TV in the United States on Monday, Dangote elaborated on the stalled negotiations with NNPC.
He revealed that the Dangote Group had extended highly favorable offers to NNPC, estimated at around $2.79 billion. However, the state-run oil company struggled to meet its commitments. Initially, NNPC opted out of two proposed arrangements and ultimately decided to limit its investment to 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 a half ago,” said Dangote. He explained that the remaining funds were split into two parts: for every crude supply, NNPC would deduct $2 until one-third was paid, while the other third would come from their profits.
However, NNPC later withdrew from this initial agreement, expressing confusion and requesting changes. They eventually proposed to pay in cash, leading to a new agreement that postponed the balance payment for one year. “In June, they came back and said they’ve changed their mind. They want to remain at 7%,” Dangote stated.
When questioned about the possibility of renegotiating with NNPC, he firmly stated that the deal is final. “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 confirmed that NNPC’s stake has now been reduced to 7.2%, citing their failure to settle the outstanding payment for the larger stake, which was due in June 2024.
