The race to acquire the downstream assets of Oando, one of Nigeria’s major indigenous player in the oil & gas industry, has reached its final stage, THE CITIZEN has learnt.
It was reliably gathered by our correspondent during the weekend that Chef Femi Otedola’s led Forte Oil Plc and Chief Benny Peters’ Aiteo Group are among the bidders that indicated interest in acquiring the downstream assets after Oando Plc offered it for sale to enable it concentrate mainly on the upstream sector.
THE CITIZEN learnt that such move prompted the management of Forte Oil to inform the Nigerian Stock Exchange (NSE) on Thursday last week that it was holding initial talks for the possible acquisition of assets of a downstream company.
In a notice to the NSE, Forte Oil said “discussions on the proposed acquisition is still in its infancy, but this announcement on this possible transaction is in the interest of full disclosure and ensuring that as a company, Forte Oil Plc adheres to the highest corporate governance practices and procedures.”
The acquisition, if it sails through, will form part of the efforts to further diversify Forte Oil’s revenue and profit base, after it last year acquired the Geregu Power Generation Plant in Kogi State, which has since become a cash-cow.
Forte Oil Plc formally took over the plant on November 1, 2013 following a successful acquisition of the 414 power generation plant under the Federal Government-led privatisation programme to divest public power assets.
As a result of the power plant acquisition, Forte Oil’s half year 2014 audited results revealed a 152 per cent growth in profit before tax, at N4.19 billion, as against the N1.66 billion reported in the correspondent period last year.
The growth in profit was significantly higher than the 33 per cent in turnover, which stood at N79.61 billion in the half year ended June 30, 2014, as against N59.96 billion recorded in the same period in 2013.
Meanwhile, Aiteo Group, unarguably, is one of Nigeria’s fastest-growing integrated energy group, with the experience and assets necessary to provide oil and gas on a regional and global scale.
Founded by the Peters brothers, Benedict and Francis, Aiteo is strategically focused on exploration and production; bulk petroleum storage; refining of petroleum products; trading, marketing and supply as well as power generation and distribution.
Founded in 1999, the company operated under the name Sigmund Communnecci Limited before it changed to Aiteo during a rebranding exercise. Aiteo’s profile in the oil industry came to crescendo this year with its hands in so many pie, which analysts say are part of its bids to expand phenomenally in the industry.
In April this year, Aiteo was among the oil companies that won $40bn oil lifting contracts awarded by the Nigerian National Petroleum Corporation (NNPC) for the yearly crude oil lifting term contracts for 2014/2015.
The crude lifting contracts cover around 340 million barrels of oil, valued at nearly $40 billion annually based on Brent prices as at that time, and run for a year, though they can be renewed.
Also in May, Aiteo Consortium made the highest bid of $2.85billion to win the Shell Petroleum Development Company (SPDC)’s Oil Mining Lease (OML) 29. The OML 29 clinched by the Aiteo, Taleveras and other members of the consortium, is the largest oil block among the four blocks offered to prospective reputable investors by SPDC.
The highly-competitive and transparent bid, which was said to have followed global best practices, when concluded, would be the biggest single ticket transaction by an indigenous company in Nigeria ever. Other members of the consortium include Tempo Energy, Energy South, AGR, and IS45.
The company also announced this year that it was trying to develop Greenfield refinery, a 100,000 barrels per day project, which is expected to come on stream by 2017.
The company’s refinery project, it was said, is presently at the conceptualization stages and it aims to fast track the development and construction of the refinery so that actual production from the refinery can commence.
Aiteo’s bulk petroleum storage facility in Port Harcourt and Apapa, have capacities for 110 million litres and 210 million litres of petroleum products respectively. It is therefore not surprising that it is making the bid to acquire Oando’s downstream assets to gain spread and achieve dominance in the downstream sector.
