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clip Forte Oil’s core investor eyes minority shares with N22b bid
Yesterday at 01:28:16 AM by genie

Forte Oil’s core investor eyes minority shares with N22b bid

 


The new majority core investor in Forte Oil Plc may soon launch a mandatory tender offer (MTO) to take over ordinary shares held by minority shareholders in line with extant rules at the Nigerian capital market.

Sources in the know at the weekend told The Nation that the new core investor in Forte Oil, Ignite Investments and Commodities Limited, may launch a tender offer of up to N22.3 billion to takeover shares held by minority shareholders in the downstream oil company.

Ignite Investments and Commodities Limited led by Prudent Energy Services Limited last week completed the acquisition of 74.02 per cent majority equity stake in Forte Oil from the company’s erstwhile chairman, Mr. Femi Otedola.

The transaction was valued at about N64 billion. Ignite Investments and Commodities Limited immediately took over the management of the company, new managing director and chief financial officer for the company. The new core investor has also made changes to the board of the company to reflect the new ownership structure.

While details of the MTO remain sketchy at the weekend, sources in the know said the new core investor’s capital market advisers had laid out the inevitability of a takeover bid for minority shares to the new investor.

The MTO is in line with the provision of the Section 131 of the Investment and Securities Act (ISA) and Rule 445 of SEC, which make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an MTO to other minority shareholders.

Ignite confirmed that it acquired 74.02 per cent equity stake in Forte Oil, which translates to about 964.097 million ordinary shares of 50 kobo each. Forte Oil has total issued share capital and outstanding shares of 1.302 billion ordinary shares of 50 kobo each. Minority shareholders thus hold 338.38 million ordinary shares of 50 kobo each.

Regulatory filing at the Nigerian Stock Exchange (NSE) indicated that the transaction price for the Ignite-Otedola transaction was N66.01 per share. However, the shares were transferred through cross deals at the negotiated window of the NSE at N66.25 per share.


Otedola had in December 2018 announced that he planned to sell his 75 per cent majority equity stake in Forte Oil to Prudent Energy, which will be investing through Ignite Investments and Commodities Limited.

Under the terms of an MTO, Ignite is expected to offer to buy the minority shares at the same price it used for the Otedola transaction.

Sources, who preferred anonymity because of potential conflict of interests, however differed on whether Ignite will follow through with a full tender offer or opt to acquire certain percentage of existing minority shareholdings and the relevant price for the MTO.

Many sources said extant rules make it mandatory for the new core investor to make a full tender offer to all minority shareholders at the transaction price for the acquisition that triggered the MTO. They insisted that this was the position of the law and general intent, which was to protect minority shareholders from bogus acquisition deals.

The sources said the transaction price is taken as a fair value for the company, and it takes precedence over current market value which may not reflect the true value and worth of the company. Forte Oil’s share price closed weekend at N31.20 per share, 52.7 per cent below the Iginte-Otedola’s transaction price.

A source, however, said the new core investor may adopt a valuation based on the average trading share price of the company over a given period, usually between 30 days and 60 days. The source also said the new investor may opt for  a reasonable percentage of the minority shareholdings, if it does not desire full takeover of the company.

Chairman, Ignite Investments and Commodities Limited, Mr Abdulwasiu Sowami, said the acquisition was a strategic investment in his company’s quest continuously to add value to the Nigerian oil and gas industry.

Sowami, who is also the chief executive officer of Prudent Energy Services Limited, said Forte Oil’s next phase of growth will focus on increasing volumes, diversifying business operations, widening distribution networks and extracting potential synergies with partners.

“We look forward to working as part of the Forte Oil family to achieve this growth,” Sowami said.
clip Banks prepared to fund rehabilitation of Nigeria’s refineries – NNPC
June 21, 2019, 03:46:55 PM by Andrew Freelance

Banks prepared to fund rehabilitation of Nigeria’s refineries – NNPC
 


Banks have expressed their readiness to fund the rehabilitation of the nation’s ailing refineries, the outgoing Group Managing Director of the Nigerian National Petroleum Corporation, Dr Maikanti Baru, said on Thursday.

After efforts to secure offshore funding for the rehabilitation of the refineries proved abortive, the NNPC said in February this year that it had to resort to immediate direct funding from internal cash flows and debt financing from the financial markets for the project.

“The government and the NNPC are determined to rehabilitate the refineries and put them back to what they were and be efficient as they should be,” Baru said.

He spoke in Lagos after his induction as a fellow of the Nigerian Academy of Engineering during the institution’s 2019 annual lecture, titled ‘Fuelling the Nigerian economy: State of domestic refining and distribution facilities.’

The refineries, located in Kaduna, Port Harcourt and Warri, have a combined installed capacity of 445,000 barrels per day but have continued to operate far below the installed capacity for many years.

Baru noted that there were decades of neglect mainly due to funding, saying, “We took some steps in 2016 when we came in.”

He stated that certain bodies had made a commitment to come and support the rehabilitation of the refineries but the negotiations did not yield the desired result.

He said, “So, we now decided as the NNPC, with the permission of Mr President, to go to the capital market to raise the funds to repair the refineries. It is not just repairs but rehabilitation; some units are completely out. We will not just repair them, we are going to modernise them and put them in a better position.

“With the gracious approval of Mr President, we need to do a detailed bankable study before we go to the capital market. So, the NNPC, using its internal resources, now embarked on this detailed study, which will be completed in October. Once we have that study, the banks are ready to fund us and we are going to rehabilitate the refineries.”

Asked if he would be willing to serve in another capacity if given the opportunity after his exit from the corporation next month, Baru said, “Well, the service to Nigeria is everybody’s call. Every patriotic Nigerian should be willing to do that. However, the system that has been put in place is that a public servant retires when he is 60 and also worked 35 years.

“However, if it’s the prerogative of the President to invite you to do more and of course, you should look at it and do more. So, it is graciously accepted my statutory retirement but if he says I should come and serve, I’m willing to serve.”

The NNPC had planned to rehabilitate the refineries in order to attain a minimum of 90 per cent capacity utilisation, using third-party financiers and the original refinery builders to provide the requisite funding and technical support.

The corporation, its transaction advisers and an inter-ministerial team on refineries rehabilitation were said to have reviewed expressions of interest from 28 potential financiers.

But after over one and half years, the negotiations with financiers stalled in December 2018 due to varying positions on key commercial terms.

 
clip Otedola completes sale of Forte Oil, deal lifts share price by 10%
June 20, 2019, 01:59:31 PM by Andrew Freelance

Otedola completes sale of Forte Oil, deal lifts share price by 10%
 

Barely one week after the Nigerian Stock Exchange (NSE), endorsed the transfer of the 75 per cent majority equity in Forte oil, from its Chairman to Prudent Energy and Services Limited, in a share purchase deal, Femi Otedola yesterday, completed his divestment after receiving full payment for the sale to Prudent Energy.

With the development, Otedola appears to now focus on his power assets, Geregu Power Plant, which was not part of the deal. Forte Oil will now concentrate only on downstream and upstream operations under its new ownership.

The deal pushed the volume of shares and share price of Forte Oil at the close of transactions Wednesday, and sold N64.38 billion, as a total of 970.17 units were traded as off market trade.

The company share price opened at N32.30 per share up from its last week opening price of N25.75, signalling a 24.44 per cent rise, an equivalent of N8.53 billion capital gains. At the close of trading, Forte oil emerged among the day’s highest price gainer with 10.00 per cent to close at N34.65 per share.

According to TRW Stockbrokers Limited, these deals were negotiated between StanbicIBTC Stockbrokers as buyer; while APT Securities and Funds Limited, WSTC Securities and Quantum Zenith Securities were sellers. Forte Oil market capitalisation was N45 billion as the conclusion of the sale was announced.

Otedola had in May 2018, obtained shareholders’ nod to divest the group’s upstream services and power generating businesses including downstream businesses in Ghana, in a move aimed at concentrating Forte Oil’s operations on its Nigeria’s downstream marketing business.

Forte Oil, however, informed the NSE of the completion of this transaction and other plans to sell some of its other subsidiaries.

During this period, the company went through due diligence and other regulatory approvals subject to the conclusion of the transaction.
clip Nigeria’s daily oil production now 2.2mb at $22 per barrel production cost
June 19, 2019, 10:18:53 AM by Andrew Freelance
Nigeria’s daily oil production now 2.2mb at $22 per barrel production cost

 


Nigeria’s daily oil production has exceeded the 2.3 million barrel per day benchmark for the 2019 budget.

The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, disclosed this in Abuja on Tuesday during a discussion with the national officials of the Nigerian Union of Journalists (NUJ)

He maintained that Monday’s crude oil output figure was a significant improvement from the average daily production of 2.1 million barrels recorded last year.

The NNPC boss also said the country was able to attract $3.6 billion and $3 billion as Foreign Direct Investment into the oil and gas industry in 2017 and 2018 respectively.

He added that some officials of the corporation were close to sealing up another $7 billion FDI into the sector in London.

He highlighted internal and external transparency in the sector as a key factor in achieving this feat.

Baru said: “Since we came in July 2016, we had been focused on increasing production of oil and gas and condensates. At some point, our national combined production was about a million barrels; I am happy that as at the end of 2018, we have moved on, averaging last year, about 2.1 million barrels.

“As I am speaking, this morning, I look at our production figures, combined oil and condensates we are pushing 2.32 million barrels a day. This stability and ability to push production has come as a consequence of several factors, both internally, externally and also with the help of the media.

“Our drive for transparency has also produced a lot of fruits. We have been able to attract FDI into the oil and gas industry and in 2017 alone, we attracted about $3.6 billion.

In 2018, we shot it up by $3 billion; at the moment, some of our officers are in London, where they are negotiating sums in the region of $7 billion as FDI for the oil and gas sector.”

Speaking on the cost of production, the NNPC helmsmen revealed that the company had been able to minimise the cost of production to $22 from $27 per barrel in the firm’s Joint Venture (JV) operations.

Read also: Oyo, Ondo, Ogun top list of 10 growing states in industrial performance

“Oil exports are the largest single source of Nigeria’s revenue and anything that makes these more appealing to buyers would help revenues grow, including reducing the cost of production”.

He, however, noted that the corporation was on the lookout for means to bringing the cost to $20 per barrel.

While shedding more light on the state of Nigerian refineries, he said, “At the Port Harcourt refineries, the contractors are on site; they are carrying out every checks and lots of non-destructive testing. We believe that by the end of October, we would have detailed review and we would approach our financiers, clearly on financing basis; raise the funds because they are quite willing to fund the operations.

“NNPC would do that and pay the loans as appropriate, being that government does not have sufficient funds to finance the refineries rehabilitation. That is why it is taking time,” he said.

By Babatunde Alao…
clip Nigeria’s fuel subsidy not helping the poor — World Bank
June 04, 2019, 11:59:49 AM by Isaac Adeleke
Nigeria’s fuel subsidy not helping the poor — World Bank
 


The Vice President for Sustainable Development, World Bank, Laura Tuck, has warned Nigeria and other countries paying subsidies on fossil fuels to desist from it as such practice was not in favour of the poor.

Tuck made this known at the ongoing World Circular Economic Forum in Helsinki, Finland while addressing the theme ‘Scale it up! The Next Era of the Circular Economy.’

According to her, the continuous payment of huge sums of money as subsidies on fossil fuels has worsened resources consumption and increased greenhouse emission and pollution.

“Strong evidence shows that a lot of countries put subsidy on fossil fuels, and these subsidies are insufficient to support the poor. They aggravate resources consumption, pollution and greenhouse gas. Globally, subsidies on fossil fuels are huge,” she added.

Tuck said, “We cannot achieve a circular economy if we continue to make policies that give incentives to overuse of resources. Circularity means we use fewer non-renewable energy like fossil fuels and carefully manage our renewable resources like Timber and fisheries, among others.”

Highlighting some of the impacts of subsidising petroleum, she said plastic products produced from fossil fuels had become cheaper, making it unprofitable to recycle plastic waste.

The President, Sitra, Mikko Kosonen, in his welcome address, called for both public and private investment in transitioning the world economy to a circular economy.

“We have 10 years to switch to a circular economy to prevent ecological catastrophe,” he warned.

The Head, Climate Change and Green Growth at the African Development Bank, Anthony Nyong, noted that African leaders were aware of the negative impact of continuous use of non-renewable energy but the willpower to make was non-existent.

Speaking at the Circular Economy for Africa Session, he said, “We spend 22 times more on subsidy than what we spend on the energy itself. That does not allow investors to come in because we have over-subsidised this initiative that other people cannot invest in it.

He advised African governments to change the narrative, see climate change as doom and gloom and identify the opportunities that could be taken advantage of in the circular economy.

“At the AfDB, we have said over the next five years, we are putting $25bn as our own investment towards that and it is sufficient to leverage other country’s resources to make sure we are on the right track in terms of the circular economy,” he added.


The Managing Director and Chief Executive Officer, Finnfund, Jakko Kangasniemi, noted that the development financing company had started working with African governments to develop commercial forestry to preserve biodiversity in Rwanda and renewable energy in Kenya.

“These opportunities are environmental and commercial opportunities where we can make profitable investments. There are huge opportunities in the circular economy in Africa. The future is bright and we can work together,” he added.
clip 60,000 candidates undergo NNPC CBT test
June 01, 2019, 07:30:39 PM by genie

60,000 candidates undergo NNPC CBT test


 


After earlier technical difficulties, 60,000 candidates finally underwent the Nigerian National Petroleum Corporation (NNPC) Computer Based Test (CBT) in 94 centres who applied for various vacant positions in the national oil company.

In Bwari, Abuja centre, candidates arrived for the CBT at about 8am but half of the computers at the centre did not come up, leaving the candidates frustrated.

The Chief Operating Officer (COO), Corporate Services of the NNPC, Mr. Isa Inuwa, made this disclosure after visiting some CBT centres along with the NNPC Recruitment Steering Committee in Abuja.

A release today in Abuja by the corporation’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, quoted Mr. Inuwa, as saying that the 2019 NNPC recruitment exercise was for the Corporation to replace some of its retiring staff and to refresh the system with fresh hands.

“The recruitment exercise by the NNPC is driven by the corporation’s manpower needs. There are about 60,000 candidates who have been shortlisted and you cannot allow the CBT to run for many days because we have enough facilities to accommodate those shortlisted and they are batched into three groups to avoid every form of impairment,” he stated.

Mr. Ughamadu explained that the recruitment exercise was conducted in the public glare as part of the corporation’s business culture of running its processes with integrity and accountable to the people, stressing that NNPC as a public corporation would always set the pace for other public institutions to follow.

The release quoted some of the candidates as commending the NNPC for conducting a seamless and transparent computer based recruitment test that offered them employment opportunity.

NNPC, an equal opportunity employer in the Oil and Gas Industry value chain, including exploration, refining, transportation and marketing of petroleum products, recently placed advertisements to recruit some categories of new hands to buoy its operations nationwide.

The ongoing recruitment exercise by the Nigerian National Petroleum Corporation (NNPC) kicked off via nationwide advertisements in the national dailies and online media on Wednesday, 13 March, 2019, followed by shortlisting of qualified candidates who sat for the CBT on June 1, 2019.
clip 223 firms jostle for 2019-2021 NGL contract
May 30, 2019, 08:08:02 AM by Charles Dickson

223 firms jostle for 2019-2021 NGL contract

 

Two hundred and twenty-three firms are currently jostling for the 2019/2021 contract for the sale and purchase of Natural Gas Liquids (NGLs), domestic and export. Speaking at the bid opening of the event, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Dr Maikanti Baru who was represented by the Chief Operating Officer, Gas and Power, Mr Saidu Mohammed, described the occasion as a strategic move to maximise the value of the nation’s natural gas liquid resources for the benefits of Nigerians and other stakeholders.

According to him, the management seeks to continuously grow our domestic gas supply and utilisation while also maximising value from our unutilised knock-off condensates and Natural Gas Liquid resources. “Our strategic focus in the coming months is to expand domestic LPG supply from our established local sources while also encouraging investments in storage, marketing and distribution infrastructure.

“Through a transparent competitive bidding and evaluation process, we intend to enlist companies with proven investments in Gas utilisation, storage, distribution and marketing infrastructure”, he explained. He listed the 2019-2020 NGLs tender objectives to include: “engaging reputable qualified companies to off-take Natural Gas Liquids (NGLs) for the domestic and international markets; ensuring selection of off-takers is aligned with tested transparent and accountable procedures in compliance with the Public Procurement & Nigerian Content Acts.

“In addition to these objectives, it is our intention to: sustain transparency in all our processes and select the best off-takers through a robust mix of big international players with strong Nigerian gas sector focus companies to ensure supply reliability and local capacity development.
clip Why Nigeria and others rely on imported refined products
May 29, 2019, 11:27:17 AM by Charles Dickson
Why Nigeria and others rely on imported refined products despite potential

“African governments MUST address the regulatory and fiscal conditions in order to attract investment and re-ignite development” – Effiong Okon, Operations Director.

 

Despite the continent’s discoveries and potential in terms of oil and gas exploration, member-countries continue to face challenges of importing refined crude as they lack sufficient refining capacity.

Seplat Petroleum Development Company Plc’s Operations Director, Effiong Okon, made this assertion during his keynote address at the Africa E & P Summit, held in London recently.

Okon, in his keynote titled: ‘Oil and Gas Rising in Africa, restated the continent’s stance as the destination for gas development and investment, stressing that there has been abundant discoveries of oil and gas reserves, which have over the years, attracted key international oil companies to the continent.

Alongside the major producers is the rise of the independents who have also come into existence and have continued to grow in leaps and bounds, he explained, adding that, “the appetite for Africa oil and gas is still growing and continues to present significant investment opportunities. Investors are attracted to the many recent and ongoing licence bid rounds in the continent.

“Most of the oil majors and the independents companies have continued to flourish with some exporting not just oil but also gas out of the continent. Most companies had to restrategise portfolio balancing after the recent downturn in oil price. Assets have been changing hands between the oil majors and the Independents.”

Some challenges, according to the Seplat director, still exist despite the significant discoveries and impressive production of oil and gas across the continent, which has a good balance of oil and gas.

He stressed: “Over 100 people in Africa still do not have access to electricity. Lack of adequate infrastructure also still presents a problem.

“These challenges present huge opportunities for gas development and investment. As a result, companies such as Seplat have remained bullish with its gas development. Seplat, whose strategic location on the gas hub in the Niger Delta, facilitates its gas development.

According to him, the growing need for capital for emerging infrastructure such as refining and transportation of petroleum commodities and products and the development of a robust petrochemical industry, places the continent at a vantage point for investments.

He said given the huge opportunity in Nigeria, the company has continued to make significant investment of over $300 million at growing its gas business resulting to its current daily production capacity.

He said: “Seplat current well stock is capable of delivering around 400 MMscfd (gross).

“In addition to these, our Sapele Gas Plant upgrade and Assa North-Ohaji South (ANOH) project is to add 315MMscfd xapacity by 2020.”

Okon noted that of the top-20 discoveries globally between 2012 and 2016, Africa had the greatest contribution compared to any other area.

2019, according to him, looks promising for Africa with discoveries in South Africa, Egypt and Angola.

He explained: “Africa is home to some of the world’s fastest growing economies, some of them lifted by new oil and gas discoveries.

“An estimated 7.5 per cent of global proven oil reserves (126.5bn bbls) and 7.1 per cent of global proven gas reserves (487.8Tcf ) sits in Africa.

“Oil and gas play a strategic role in economies of African countries giving them power and influence on world stage, and this trend is likely to continue with new discoveries in Ghana, Egypt, Algeria, Libya, Tunisia, Mozambique, and Uganda.
clip Nigeria Approves New Crude Oil Export Terminal In Niger Delta
May 29, 2019, 11:18:51 AM by Andrew Freelance
Nigeria Approves New Crude Oil Export Terminal In Niger Delta


 

 CDT Nigeria oil pipelines

Nigeria’s government has authorized a local oil company to operate a new floating crude oil export terminal off the coast of the Rivers state in the oil-rich but still troubled Niger Delta.

Belemaoil Producing Ltd has been allowed to moor a floating storage and offloading (FSO) unit and use it as a crude oil export terminal, according to a letter signed by the Director of Nigeria’s Department of Petroleum Resources (DPR), Mordecai Ladan, Nigerian media report.

The new terminal, which will be known as Belemaoil Terminal Kula, is expected to create more than 10,000 jobs and other opportunities for the unemployed youths in the area, according to Samuel Abel-Jumbo, External Relations Manager at Belemaoil.

Not all local communities in the Niger Delta have been happy with the major international oil companies operating in their region, and Nigeria’s oil industry has frequently suffered sabotages, oil theft, vandalism, and militant attacks on infrastructure.

Nigeria, Africa’s largest oil producer and an OPEC member, is dusting off an ambitious plan to double its oil production by 2025, aiming to pump as much as 4 million bpd in six years’ time—a goal that analysts think may be too ambitious for the country to achieve.

Nigeria currently pumps around 2.2 million bpd in crude oil and condensate. In April, Nigeria’s crude oil production alone stood at 1.819 million bpd, up by 92,000 bpd from March, according to OPEC’s secondary sources.

Nigeria may have a hard time achieving its ambitious oil production goal because of security concerns and the continuous oil theft and resulting oil spills in the Niger Delta that have been affecting the operations of supermajors like Shell and Exxon.

At the end of last month, sabotages and oil leaks led to several operators declaring force majeure on key oil export grades, including Shell declaring force majeure on Bonny Light exports, which was lifted more than two weeks later.
clip Oil and Gas Jobs Fircroft Recruitment
May 29, 2019, 10:48:26 AM by Andrew Freelance
Oil and Gas Jobs - Fircroft Recruitment
Roles include offshore, subsea, pipeline and drilling engineering to HSSE. fircroft.com

 


about us

Fircroft has been placing people in specialist technical industries for approaching half a century, focusing on mid to senior level engineers for contract and permanent roles worldwide.

Fircroft currently has over 12,000 contractors placed in roles around the world and, as well as contractor recruitment, we also fill permanent job vacancies across our key sectors; Oil & Gas, Automotive, Petrochemical & Chemical, Power, Nuclear & Renewables, Mining & Minerals, ICT and Infrastructure & Construction.

With global contracts with the world’s largest technical engineering companies, Fircroft will find you a role that supports your professional life, builds on your skills and fulfils your potential, within a work culture that suits you.
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