Dangote: How NNPC will fund $2.7bn equity deal in our refinery

Aliko Dangote, chairman of Dangote Group and Africa’s richest person, says the Nigerian National Petroleum Corporation (NNPC) will not pay for 20 percent minority equity stake in the Dangote Refinery in a single cash transaction.

Speaking on Tuesday during an interview on Arise TV, Dangote said only one-third of the $2.76 billion deal with the NNPC would be paid in cash.

The Dangote Refinery is a 650,000 barrels per day integrated refinery project under construction in the Lekki Free Zone, Lagos. It is expected to be Africa’s biggest oil refinery and the world’s biggest single-train facility, upon completion.

The billionaire businessman said the second payment would be through crude sales, and the last payment would be through profits made by the corporation.

“So, these are the things that people don’t really understand and I want to really clarify it. When they talk about the $2.7 billion, you know, they (NNPC) are paying one-third of the money,” Dangote said.

“Another one third of the money, again, will actually be paid through supply of crude, with the deduction of maximum of about $2 and some cents. And then the one third of it, which is another $850 to $900 million will be paid from the profit they are going to make from the business.

“So it’s not a cash transaction where they are paying all cash. You can see that if we don’t have confidence in what we are doing, we would have asked them to pay all cash.”

He added that the refinery is capable of meeting the country’s entire petrol, diesel and jet fuel needs, thereby helping the country to save 25 percent of its import bills currently being spent on bringing in petrol products into the country.

“It makes me feel terrible to see a country as big as Nigeria, as resourceful as Nigeria and with this sort of population that we have 200 million plus, we’re importing all our petroleum products. I mean, it is very painful,” Dangote said.

“So with that, I thought in my mind, and I said that somebody has to address this issue. We tried before, in 2007 like what I said earlier on, but the government of that day changed their minds, and then we jettisoned the idea and returned them.

“But right now, we came back with the support of the government to make sure that yes, we help in addressing this issue of not only Nigeria. Because I’m a Nigerian and I’ve benefited quite a lot from Nigeria and if there are issues to be sorted out, I should be one of those who will bring solutions to our national problems.”

On the Petroleum Industry Act (PIA), Dangote said that Nigeria lost between $50 billion to $60 in investments due to its delayed  passage.

He expressed optimism that with the recent presidential assent, investors who had been sitting on the fence are now expected to move into the country.

Speaking on the benefits of the Dangote refinery, he said the project currently employs 29,000 Nigerians and 11,000 foreigners with plans to ramp up the number to 57,000 in the coming months.