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Oando Seeks Controlling Stake in PH Refinery

Posted by By Mike Oduniyi on 2005/07/06 | Views: 410 |

Oando Seeks Controlling Stake in PH Refinery

With multinational oil companies shunning interest in the country’s refineries, indigenous fuel marketer Oando Plc is seeking to acquire a controlling stake in the Port Harcourt Refining Company.

* BPE in fresh bid to privatize NNPC downstream assets

With multinational oil companies shunning interest in the country’s refineries, indigenous fuel marketer Oando Plc is seeking to acquire a controlling stake in the Port Harcourt Refining Company.

This follows a fresh bid by the Bureau of Public Enter-prises (BPE) to sell controlling shares in downstream assets of the Nigerian National Petro-leum Corporation (NNPC), including the four refineries and the Eleme Petrochemicals Company Limited, Port Harcourt, Rivers State.

THISDAY gathered that Oando, one of the six major oil marketing companies in the country, was among the few largely independent oil operators that participated in a “bidders forum” staged in the United Kingdom last week by BPE Privatisation Advisers, Credit Suisse First Boston (CSFB), for the re-launch of the privatization process for the Port Harcourt Refinery.

Company sources disclosed that entering into the bid process for Nigeria’s biggest refinery was part of the company’s strategy to reduce its dependence on imported products.

Oando is, however, matching its bid to become core investors in the 210,000 barrels per day (bpd) Port Harcourt refinery with application as a Local Content Vehicle in the 2005 Bid Round for oil licenses.
“Oando is currently bidding for the Nigerian government's controlling stake in the Port Harcourt refinery. Entry into the refining sector will impact on other companies in the group,” a senior official of the company confirmed yesterday.

THISDAY reported recently moves by Oando to get listed on South Africa’s Johannesburg Stock Exchange (JSE) in a bid to access funds for the oil refinery project.

“Apart from being a ready source of supply to the company’s supply and trading arm, our studies showed that the proposed refinery bid can generate between $3 billion and $6 billion annually for the company,” the official added, while dismissing claims by the oil majors of the non-profitability of refining business in Nigeria.

The BPE, the Federal Government agency responsible for the sale of public enterprises, first launched bids to sell the Port Harcourt refinery in November 2003, when it called for expression of interest from local and foreign companies.

However, the Presidency was said to have been dissatisfied with the status of companies that eventually showed interest in the plant, and consequently cancelled that exercise. The government’s subsequent appeal to oil majors to take up the management of the refinery was equally rejected.
The oil majors have consistently maintained that the operating environment in Nigeria was not conducive for refinery business.

THISDAY checks revealed that in the latest bid by the BPE, the privatization adviser has already divided the process into two phases. The first phase is for the bidders to commence the submission of expression of interest from July 3, 2005. The second phase entails submission of Bidding Offer by the prospective investors.

“On behalf of the BPE, the CSFB set up a data-room with supplementary information to the Preliminary Information Memorandum,” a source disclosed.
The source said that the UK bidders’ forum was to discuss due diligence issues and concern with prospective investors. “The forum provided opportunity to discuss important assets and process matters. The CSFB arranged presentations by the IFC and African Development Bank to make presentations on the possible roles they could play in the privatization transaction.”

According to statistics supplied by the BPE, the Port Harcourt Refining Company (PHRC), which houses two refineries, the 60,000 bpd old Port Harcourt refinery and the 150,000 bpd new plant, has an authorized share capital of N5 million divided into five million ordinary shares of N1 each.

The BPE has also fixed today as the deadline for prospective companies to show interest as core investors in the Eleme Petrochemicals Company Ltd. Investors are being required to acquire 51 percent controlling shares and management control of the plant.

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Comments (3)

Okfold(Sobe, Edo, Nigeria)says...

I want the meaning of female owan name Ekeke (Edo state)

Toluwalase Samuel Olufemi(Ijebu, Ogun, Nigeria)says...

Authority belongs to God, once He decrees it is final and binding

Ikponmwosa Osamede(Edo, Nigeria)says...

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