The President of Dangote Group and founder of Dangote Refinery, Aliko Dangote, has said the decision of the Nigeria National Petroleum Company (NNPCL) to settle for a 7.2 percent share in its refinery was a huge mistake.
Aliko Dangote said the refinery gave the NNPC a good deal despite many reversals of contract agreement reached, but Nigeria’s oil company chose a 7.2 percent share.
Dangote stated this on Monday while speaking with Bloomberg Television in New York.
In his words, “We gave them (NNPC) a good deal. We said, okay, fine, we structured an agreement. The first agreement was that they were going to pay us a billion dollars. The deal was about $2.79 billion. And then the balance of the money, $1 billion, which they paid us over a year and a half ago, and then the balance of the money was split into two.
“One portion was that every crude they supply to us, 300,000 barrels per day, we’ll deduct $2 and then up to the time they finish paying that, one third. The other one third will come out of their own profit. So, why NNPC opted out is a little bit confusing.
“They wanted this agreement to be changed where they wanted to pay cash, not in any other way. So, we said, okay, fine. We signed another agreement, you know, cancelling the other one. The new agreement that we signed was for them to pay us after one year, no interest, after one year, they’ll pay us the balance of $1.8 billion.
“The month for them to pay was June. And by June they came back to us and said, no, they’ve changed their minds and they want to remain at 7.2 percent. So, okay, fine. So, we left it and we own now the rest of the shares, they own 7.2 percent. And that’s what it is. But I think they made a big mistake.”
Dangote added that there was no room again for further negotiation of the shares, stating, “The agreement is finished, dead, completed. It’s 7.2 percent.”