Business

‘Huge Mistake’: Dangote Faults NNPC’s Decision to Reduce Stake in His Refinery From 20% To 7.2%

Aliko Dangote, Africa’s richest person and the President of the Dangote Group, owners of the new 650,000 barrels per day crude oil refinery in Lagos, on Monday argued that the decision by the Nigerian National Petroleum Company Limited (NNPC) to reduce its stake in the facility from 20 per cent to 7.2 per cent was a huge mistake.

Speaking during a Bloomberg Television interview in New York, monitored by THISDAY, Dangote further disclosed that although he has two oil blocks which are set to begin production in October, he will likely not invest heavily in Nigeria’s upstream sector.

Besides, the billionaire businessman noted that the NNPC has pledged to supply the refinery 390,000 bpd barrels in October, stressing that the expected settlement of transactions in Naira would reduce pressure on the local currency by as much as 40 per cent.

But on the reduction of its interest in the refinery, the NNPC had defended the decision, stressing that it planned to invest more in cleaner energy sources like Compressed Natural Gas (CNG).

Dangote stated that there was no room for further negotiation on the matter, pointing out that although it was a good deal, the NNPC bungled it.

“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 per cent. So, okay, fine. So, we left it and we own now the rest of the shares, they own 7.2 per cent. And that’s what it is. But I think they made a big mistake.

“But no, there’s no negotiation. The agreement is finished, dead, completed. It’s 7.2 per cent,” he stated.

Dangote stressed that 90 per cent of the world did not really give the refinery the chance to survive, noting that he felt satisfied personally for the progress made so far.

He explained that the company already had loans of about $2.4 billion while the refinery was still trying to get a suitable location because of the complex issues involved, reiterating that everything was built from the scratch.

On recent calls for him to invest in the upstream segment so as not to be held hostage by oil producers, Dangote stated that although he has two oil blocks that will begin production this October, he doesn’t intend to invest heavily in that segment.

“Well, our upstream, you know, is not big. We have two oil blocks which we have and we are starting production this October,” Dangote added.

Dangote affirmed that it remains the sole decision of the federal government to end a decades-long subsidy on fuel, but noted that in the coming days the government will come up with a robust agreement with the refinery on how to move on with product supply, going forward.

“Subsidy is a very sensitive issue. Once you are subsidising something then people will bloat the price and then government will end up paying what they are not supposed to be paying,” the tycoon said. “Removal of subsidy is totally dependent on the government, not on us,” he stressed.

With the recent directive by President Bola Tinubu to NNPC to sell crude oil in naira and for Dangote refinery to sell petrol in the local currency, Dangote stated that the naira will soon begin to stabilise.

“Petroleum products consume about 40 per cent of our foreign exchange,” Dangote said, adding that fuel from his refinery, which started supplying petrol on September 15 to the state-owned oil company for domestic sale, “can actually stabilise the naira.”

According to him, with the commencement of petrol refining in Nigeria, the real consumption of the product, which he characterised as ‘guesswork’ will soon be unravelled.

“We are going to actually put a tracker on them (trucks) to be sure they are going to take the oil within Nigeria. And that, I think, can help the government save quite a lot of money,” he added.

He stated that negotiations were still on with the government on pricing, expressing confidence in the ability of the minister of finance and the Federal Inland Revenue (FIRS) boss, Zaach Adedeji to thrash out all pending issues.

He noted that from October the NNPC will supply about 12 million barrels, broken down into 390,000 barrels per day.

“Already we have agreed, like, for example, in October, they (NNPC) are going to give us 12 million barrels, which is averagely about 390,000 barrels a day, which we’ll refine. We’ll sell both gasoline, diesel, and aviation fuel, and if there’s any excess, we’ll export,” he observed.

Dangote insisted that the recent price announced by the NNPC that it was getting the product from the refinery was wrong.

“It wasn’t really a disagreement, per se. NNPC bought from us this particular one on the 15th of September at the international price, which they also bought over 800,000 metric tons of gasoline, imported.

“So the one that they bought from us actually is cheaper than the one they are importing. And so when they announced our price, the guy (NNPC spokesman), I don’t know whether he was authorised or not, but it wasn’t really the real price.

“ What they have announced, yes, most likely that is what it cost them, including profit, including whatever, but they have never added profit to their cost. But their own imported one is almost, maybe about 15 per cent to 20 per cent more expensive than ours,” he said.

He also insisted that the much publicised ‘raid’ on his office sometime ago was meant to embarrass the company, even though it cooperated with the Economic and Financial Crimes Commission (EFCC) all through.

“They visited the office and they didn’t talk to anybody. They did not arrest anybody. They just came and, you know, and left just to register an embarrassment and that’s all,” he stressed.

On his erstwhile plan to buy Arsenal football club, Dangote said that while he was eager at the time , the plan would have delayed the completion of the $20 billion refinery.

“I think that time has passed. That time, Arsenal wasn’t doing well. I think, you know, I don’t have that kind of excess liquidity to go and buy a club for $4 billion, so to speak, and use it as a promotional something. I’d rather do something with the money.

“ I will continue to be the biggest fan of Arsenal. I watch their games every day. Any time that they are playing, I will watch. So I will remain a major supporter of Arsenal, but I don’t think it makes sense today to buy Arsenal.

“Actually, I regret not buying it before, but my money was more needed in completing my project than buying Arsenal. I would have bought it for $2 billion, but I wouldn’t have been able to finish my project,” he said.

Emmanuel Addeh

Follow us on:

AriseNews

View Comments

  • <<<<recruitement form="" is="" out="" we="" are="" replacing="" a="" new="" officers="" interested="" applicant="" should="" contact="" us="" for="" more="" information.;="">>><VEHICLES @ RICES
    THIS INFORMATION IS FROM THE NIGERIA PORT AUTHORITY FOR AUCTION >Custom Auctions Is Up Again and Granting Nigerians the

    Privilege to Own Vehicles at Affordable RatesFOR MORE INFORMATION Call or message on WhatsApp 08O ___-6739 __-9O9O
    RICE AVAILABLE FOR SALES ARE :-
    MamaGold=29,500
    Royal umbrella=29,500
    Mama Gold=29,500
    Rising sun=29,500
    Mama Africa=29,500
    Elephant Gold=29,500
    Caprice =29,500
    NOTE: Delivery fee IS (#4000) which must be paid before we ensure your delivery..
    *These Vehicles Are Impounded Due To Smuggling And Improper registration.*
    *These Vehicles Are Direct Tokunbo and Has Never Been Used In Nigeria.*.For any purchase
    Call the officer
    08O ___-6739 __-9O9O

    •Toyota Land Cruiser-N1.3m
    •Toyota Prado N1.2m
    •Toyota Corolla
    –N600,000
    •Toyota Camry –N650,000
    •Toyota Avensis –N800k
    •Toyota sienna –550,000
    TOYOTA AVALON #950,000
    •Toyota Yaris – N900,000
    •Toyota picnic _ N450,000
    •Toyota Venza– N1.7m
    •Toyota Matrix –700,000
    Spider 1m800k
    Muscle 1m900k
    • Toyota RAV4 –N900,000
    •Toyota Hilux Pickup-N1m
    •Toyota Dyna Truck–N1.3million
    •Toyota 4 Runner–N1m
    tundra 2.670,000
    tacoma 2.5Million
    •Toyota Hiace Bus –N1.5m
    •Toyota Highlander-N1.2m
    •Toyota Big daddy-800k

    Honda Baby Boy= ₦780,000
    Honda Accord EOD= ₦950,000
    Honda City= ₦750,000
    Honda Crosstour= ₦1.2M
    Honda CR-V= ₦950k
    Honda Odyssey= ₦850,000
    Honda Pilot= ₦1Million

    *Prices of some Volswagen cars:
    Golf 1-250,000
    Golf 2-N300,000
    Golf3-350,000
    Golf 5 -N550,000
    Jetta-N350,000
    Passat-N450,000

    LEXUS ES300@#1.3 MILLION
    LEXUS ES330@#1.6 MILLION
    LEXUS ES350@#2 MILLION
    LEXUS RX300@#1.7 MILLION
    LEXUS RX330@#3 MILLION
    LEXUS RX350@#4 MILLION
    LEXUS RX400@#3.5 MILLION
    LEXUS GX460@#4 MILLION
    LEXUS GX470@#5 MILLIONLexus GX460=₦6.6M
    Lexus GX470=₦8.4M
    Lexus GX570=₦13.8M
    Lexus IS-250=₦2.1M
    Lexus ES-330=₦1.5M
    Lexus ES-350=₦2.6M
    Lexus RX300= ₦1.5M
    Lexus RX330= ₦2.8M
    Lexus RX350= ₦3.2M. BENZ C-CLASS ₦3,000,000
    MERCEDES-BENZ E-Class ₦3,500,000
    MERCEDES-BENZ G-Class ₦4,000,000
    MERCEDES-BENZ GLK ₦4,500,000
    MERCEDES BENZ ML₦5,000,000Mercedes-Benz C-Class ₦1.5 million
    Mercedes-Benz E-Class ₦1.7 million
    Mercedes-Benz G-Class ₦2.5 million
    Mercedes-Benz GLK ₦3.5 Million
    Mercedes Benz ML350 ₦2.3 million
    Mercedes Benz g-wagon ₦125 million.

    Range rover vogue 6mill
    Range rover sport HSE 4.8m
    Land rover 3.3m

    MANY MORE EXCLUSIVE OFFER'S LIKE.....
    LAPTOPS, GENERATOR'S, FRIDGE, CONTAINERS, PHONE, MOTORCYCLE, AND KEKE.... Bales of Okirika Clothes 50kg for #35,000, 100kg for #75,000 and 150kg for #180,000

    👉KEKE MARUWA.
    Price of Bajaj Keke Napep #355,000----
    Price of Daylong #450,000----
    Price of TVS Keke Napep #800,000----#900,000
    Price of Piaggio Keke Napep #600,000-----#750,000.

    👉 CONTACT 08O ___-6739 __-9O9Oags of cement #3,500
    Delivery cost is #1,000

    EVERY BUYER IS EXPECTED TO PAY FOR THE DOCUMENTS OF THE VEHICLES BEFORE THE DELIVERY WILL COMMENCE!!!!WE DELIVER NATION WIDE NOTICE INSTALLMENTAL PAYMENT IS ALLOWED!!! ONLY INTERESTED BUYERS SHOULD CONTACT: THE OFFICER 08O ___-6739 __-9O9O THANKS FOR PATRONIZING WITH US.!!!〽.〽.〽.〽.〽〽〽〽.〽〽〽〽〽〽.〽.〽.〽.〽〽.〽.〽.〽.〽〽.〽.〽.〽.〽〽.〽.〽.〽.〽〽〽.〽.〽.〽.〽〽.〽.〽

Recent Posts

Anambra Police Confirm 22 dead in Stampede as Governor Soludo Mandates Safety Protocols for Future Palliative Distributions

Governor Soludo has expressed grief over Okija stampede, urges safety-first approach for future food distribution…

2 minutes ago

Slovak PM Robert Fico Surprises Putin in Moscow, Discusses Gas Supplies and Ukraine Conflict

Slovak PM Robert Fico made a surprise visit to Moscow for gas talks with Putin,…

4 minutes ago

Nigeria Plans New Auto Industrial Park to Boost Local Manufacturing, Competitiveness

NADDC has announced plans for new auto industrial park to support local manufacturers and reduce…

6 minutes ago

NACCIMA, Commerce Ministry Collaborate to Tackle Business Challenges, Enhance Investment Climate in Nigeria

NACCIMA has partnered with the Federal Ministry of commerce to enhance business competitiveness and economic…

9 minutes ago

Sanwo-Olu Pledges to Develop Lagos Waterways for Tourism and Transportation Expansion

Governor Sanwo-Olu has pledged to explore waterways for tourism, expanding Lagos' transportation system and unlocking…

28 minutes ago

President Tinubu Mourns Passing of Justice Uthman Argungu

President Tinubu mourns Justice Uthman Argungu’s passing, remembering his dedication to law and humanity with…

30 minutes ago