Says NNPC to recoup their investment in three to four years

Africa’s richest man and Chairman of the Dangote Group of Companies, Chief Aliko Dangote, has revealed that one-third of the Nigerian National Petroleum Corporation (NNPC) investment in the on-going Dangote refinery project will be paid with the supply of crude oil.

He made the clarification during a recent documentary of the project aired on Arise TV, and seen by

Mr. Dangote’s reaction is sequel to the eyebrows raised in some quarters over the cost of NNPC’s investment in the refinery. Although it is a private oil refinery, the NNPC had recently announced that it will be acquiring about 20% stake in the refinery for about $2.76 billion. While many experts had lauded the scheme, some others have raised concerns over the cost and sought clarification over what the federal government’s role will be in the private refinery.

In response to these concerns, the renowned businessman and Africa’s richest man noted that the amount ($2.76 billion) will not be paid in cash all through. He noted that about one-third of the amount will be settled through the supply of crude, while a further one-third will be settled through the profit NNPC made from the investment in the refinery.

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Commenting on this, Aliko Dangote said: ‘’People keep talking about the cost of the refinery, they (NNPC) didn’t buy only the refinery, they bought refinery with petrochemicals, so these are things people don’t really understand and I want to really clarify it. And when they also talk about the $2.7 billion cost, they are paying one-third of the money, while a further one-third of the money will be paid through the supply of crude with the deduction of maximum about $2 some cents and then the one-third of its which is about $800-$900million will be paid from the profit they are going to make from the business. So it is not a cash transaction in which they are paying in all cash. You see, if we don’t have confidence in what we are doing, we would have asked them to pay us all cash.’’

On the other hand, the business tycoon lauded the intervention of NNPC in the projevting, noting that the intervention was critical and called for. Elucidating his points, Dangote said: ‘’They (NNPC) cannot just sit down, for energy security; they can’t just sit down and see this kind of massive project without being involved in it. But when you look at it again, we are not only cooperating with them, you know because if we now have to go our separate ways, it won’t be good for the industry. It is a very mutual beneficial relationship, we welcome it and it is not going to take them much time, maybe three or four years to recoup their own investment.’’