We refer to the newspaper publications in 'This Day' newspaper of Wednesday June 27, 2012 and Thursday June 28, 2012 relating to the alleged report by the Federal
Government Technical Committee on Payment of Fuel Subsidies, set up by the Hon.
Minister of Finance and Chaired by Mr. Aigboje Aig-Imoukhuede to verify the 2011
fuel subsidy payments to oil marketers of which Oando PLC and its subsidiary, Oando
Supply and Trading Ltd were included.
The terms of reference of the Technical Committee on Payment of Fuel Subsidies were stated as follows:
i. Authenticate the backlog of outstanding payments of subsidy payments to
marketers in 2011
ii.Verify the legitimacy of backlog of claims already submitted by marketers for 2011
iii. Review any other pertinent issues that may arise from the exercise
Considering the gravity of the mandate, the committee ought to have:
1.Taken adequate steps to ensure the veracity of their reports by listing
all its queries and inviting the market operators to defend themselves;
2.Provided copies of the draft report to members of the committee,
including the sector representatives MOMAN and IPMAN, to verify their findings
against the realities of downstream operations in Nigeria;
3.Acted with duty of care before releasing the report to the press.
Unfortunately, the committee did not take all reasonable steps in ensuring the
fulfillment of its mandate, giving rise to misinformation and confusion across the industry.
Accordingly, we state without equivocation that:
a.On the allegation of subsidies paid without auditor's signature on shore
tank receipt documents (10 transactions listed against Oando) - Upon arrival of
vessels, government agencies including PPPRA auditors and DPR, verify quantity on board as well as shore tank volumes prior to the commencement of receipt. As such it is virtually impossible for vessels to discharge without due sign offs by the authorities. We have documents duly witnessed by all government agencies including PPPRA, DPR and independent inspectors for all discharges including the stated transactions.
b.On the allegation of subsidies paid without evidence of Bill of Lading
documents (2 transactions listed against Oando) - Oando has never claimed subsidy
without evidence of Bill of Lading. Indeed, it is obvious that a company cannot
import without a Bill of Lading. All Bills of Lading and shipment documents are
available for inspection as we had earlier provided them to other authorities upon
c.On the allegation of subsidies paid without evidence of bank sales
proceeds (29 transactions listed against Oando) - We have evidence of all bank sales
proceeds and trucking reports regarding the said transactions and are prepared to make same available to the committee.
d. On the allegation of subsidies paid but transaction disclaimed by Banks
(1 transaction listed against Oando) - The letter from the bank confirming the said transaction is available for inspection.
We look forward to the opportunity to present these documents to the committee so that they can appropriately conclude their report.
Irrespective of the multiplicity of probes initiated by the various tiers of
government since the start of the year, Oando has always been ready, willing and
able to provide all relevant documents supporting claims made, both past and
present, against the Petroleum Subsidy Fund (PSF) and to demonstrate the culture of integrity that the company stands for.
Oando is a law abiding body and as a key industry stakeholder remains committed to supporting the Federal Government in ensuring petroleum products are made available nationwide.
Find below a link to the document on our website:
Please do not hesitate to contact me if you require any additional information.
Head, Investor Relations
2, Ajose Adeogun Street
Tel: +234 (1) 2601290-9, Ext 6396
DL: +234 (1) 2702496
Fax: +234 (1) 2611366
Economic perspective and analysis by Afripol Organization www.afripol.org
The West African energy giant, Oando Plc of Nigeria is set to raise the sum of 21 billion naira ($140 million) by selling shares in the capital market. The capital raised will be used to finance ventures in energy sector and
The West African energy giant, Oando Plc of Nigeria is set to raise the sum of 21 billion naira ($140 million) by selling shares in the capital market. The capital raised will be used to finance ventures in energy sector and"refinancing the acquisition of upstream assets, providing operational capital to fund the operation of the upstream business, and short and medium term investment in its gas and power business segment."
Oando Plc headquartered in Lagos, Nigeria is the biggest indigenous energy firm in Nigeria that market oil products and involve in oil exploration at its acquired upstream assets, the segment that will receive the largest chunk of the proposed capital infusion.
Oando Plc will raise the capital "through a Right Issue of 301,694,878 ordinary shares of 50 kobo each at N70.00 per share on the basis of one 1 new ordinary share for every 3 ordinary shares of 50 kobo each held as at the close of business on Friday, 18 December 2009." Two powerful and resourceful companies in the capital market: Vetiva Capital Management Ltd. and Stanbic IBTC Bank Plc will participate in the selling of the shares to raise the proposed capital.
The capital market venture was announced by the CEO and Group Managing Director, Mr. Wale Tinubu at the end of the meeting of the executive board of directors. According to Mr. Wale the company planned to raise the capital for the refinance its acquisition of upstream assets.
The achievements of Wale Tinubu, the erudite and efficient chief executive officer must be acknowledged as a driving force at Oando Plc for his vision and leadership. Under his strategic leadership Oando‘s growth has been tremendous thus appreciating the shareholders’ dividends.
During the press conference Wale reaffirmed, "the size of the business we run at Oando Plc would require a substantial amount of capital. We are doing things in several stages. The one we are doing now is Right Issue which is a small amount of N20 billion for the recapitalisation process. Then we will be proceeding to do a much larger international equity Issue which would occur at the beginning of the second quarter. Then there is going to be two debt issues. One is a local five year debt issue which we are working on right now and the mandate has been signed, it’s in the final stages."
Wale further emphasized: "the final thing would be the bond issue. We are in the process of fund raising the debt restructuring 5 year term for N60 billion. Then we would do an international equity and debt raising of N75 billion which would come in the 1st week of April (second quarter). The bulk of the money is going into our gas and upstream division for the upstream, we have our crude oil. You are aware; we have diversified heavily towards increasing our production in the crude oil sector."
The bold move made by Oando Plc buttressed the company’s growth and strong confidence even in the turbulent oil industry especially in Nigeria with her unending problems in Niger Delta. The issue of Niger Delta has a global effect on the oil price and energy sector but with relatively less impact on the oil-marketer Oanda.Oando Plc is listed on both Nigerian and Johannesburg Stock Exchanges, and has been concluding the arrangement to be listed in London Stock Exchange.
Recently it was reported by Reuters that "Dow Jones Capital Markets Report reported that Oando Plc had signed Memorandum of Understanding with Gazprom OAO. The two companies have agreed to collaborate on the development of oil and gas assets and infrastructure in the West African sub-region and the Gulf of Guinea."
Oando Plc is growing rapidly by increasing the number of oil rigs and "All Africa reported that Oando Plc has increased its fleet of oil drilling rigs to three with the acquisition of a USD 53.5 million rig, named the Constitution. Constitution, a swamp barge rig, has capacity for approximately 15,000 psi pressure output, about 3,000 horse power as well as the ability to undertake drilling operations, work over and high pressure/high temperature (HPHT) wells of over 30,000 ft drilling depths. The facility was purchased in July 2008, and was recently delivered to the Company. "
Emeka Chiakwelu, Principal Policy Strategist at Afripol, recently speaking at Energy Workshop noted that "Energy industry is capital intensive and continuously needs injection of large resources. The growing energy companies in Nigeria and Africa must be willing to look beyond the continent to raise capital that Africa cannot provide." Therefore Oando Plc is moving in the right direction.
Oando Plc is gradually but steadily making impact in the energy industry, therefore the infusion of the 21 billion naira will strengthen and energized its business prospect.
Oando’s stocks are doing well in the stock market in spite of the global economic downturn. Oando Plc must widen its scope beyond Africa and venture into new territory particularly in East Asia and Latin America. And the company must spend more resources in public relation to become an international household name, thus deemphasizing its Nigerian localized image.
Oando Plc has the potential and the credibility to become a major player in the global energy industry in 21 century. With this enormous injection of proposed capital Oando Plc is geared up for growth and expansion.
CAMAC Energy Inc. (NYSE Amex CAK 3.97, -0.18, -4.31%) US publicly traded Energy Company that primarily engaged and focused on strategic development of oil projects by singular and multilateral operations. The market capitalization of the formerly Pacific Asia Petroleum Inc is about 632.1 M and the stocks have been hovering slightly below or above $ 4.00 momentarily.
With the market prospect of Camac Energy Inc, the stocks are highly recommendable for a diversified portfolio especially at this time in the global economy and the stocks are likely to appreciate in near future. The stocks which traded without much exposure at OTC bulletin board as Pacific Asia Petroleum is now a listed company at AMEX and NYSE as Camac Energy Inc after acquiring principal assets in the Oyo Oilfield. With its superior management team and implementable strategies it can grow to become a mid cap or even a large cap energy company at a faster pace. Superior management as an invaluable human capital can be an antidote to mistakes and bulwark to unforeseen circumstances and risk management.
Camac Energy Inc has opportunities for advancement and growth because of its holdings particularly in West Africa and China oil fields. Moreover the management has high quality individuals who have been in oil business for long time with enviable experience. The human capital can be leverage for advancing the energy company. The beginning of standard & Poor’s Factual Stock Report coverage comes with a credit rating that will enhance accountability and transparency, thus affirming optimum confidence in the company.
In Nigeria, Camac energy’s " principal assets include the Oyo Oilfield, an offshore oil asset in deepwater Nigeria that started production in December 2009; the Zijinshan Gas Asset, a 100%-owned gas asset in the Shanxi Province, China; and the Enhanced Oil Recovery and Production business in Northern China."
With its footing in west Africa, Camac Energy Inc may not only have to rely only its operation in Oyo Oilfield but it can also bid for oil exploration licenses in Nigerian deep waters and off shore. In Nigeria the risk of political tension and disturbances in Niger Delta is slowing down and it can minimize the political risk by bidding for off shore drilling. In China, Camac Energy with its subsidiaries can explore more oil fields in negotiated partnership with the authorities of provinces in the country.
The quantum development of Energy Company entails high intensive capital and lot of patience and prudence. This is where the experience and management acumen of quality individuals including the company’s President and CEO, Frank C. Ingriselli and Dr. kase lawal, a board member of the company, The chairman and Founder of Camac International Corporation comes handy.
Dr. Kase Lawal as a strategic asset
kase Lawal, Chairman of Camac Energy Inc has a strategic experience in global oil business, his dealings and undertakings in the world of oil deals can help propel Camac Energy Inc to greater heights. The management skill of the CEO Frank C. Ingriselli has been noted and enhanced since his touch of guidance he gave to the formerly Pacific Asia Inc until it became Camac Energy Inc and his invaluable experience as the former president of Texaco international. Lawal and Ingriselli intellectual synergy is a solid foundation.
Dr. Kase Lawal has a good and solid track record in company development and management. He has not been exempted from risks and mistakes associated in the business world but he has a sustainable quality that aided him to triumph over hiccups. He is the Founder/chairman and chief executive officer of CAMAC International Corporation and chairman of Allied Energy Corporation. The managerial prudence, business touch and guidance he utilized as he continued to develop his CAMAC Holdings can become a great asset to Camac Energy Inc. Kase Lawal as board member of Camac Energy Inc may not manage the daily business activities of Camac Energy Inc but his strategic input from his long accumulated experience can become an essential building block to the company.
Reorganization as inevitable tool for growth
Camac Energy Inc needs middle managers who are willing to work hard and provides the strategic compass for the company’s growth. These managers must be willing to take calculative risks and willing to feel the pulse of the shareholders. Reorganization enable a company to adapt to dynamics of the market place and able to compete effectively in the high energy of oil exploration and development.
Camac Energy Inc has good people in management including the recently new CFO Abiola Lawal, an erudite and intelligent manager. Mr. Abiola Lawal has been among the pillars of Oando Plc from where he came to joined Camac Energy, his strategic endeavors at Oando Plc speaks volume of his vision and skill. He brings the strategic depth to bear to the new position.
Camac Energy Inc is poise for growth and advancement but it must be prepare and ready for the challenges and opportunities in this competitive arena of oil’s exploration and production.
Afripol Organization. Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa.
Oil and gas industry is large capital intensive that requires enormous resources for its finance, management and operation. The inability of local banks inNigeria and south of Sahara to finance massive oil and gas projects are not news anymore. The capitalization of banks in Africa is quite low to engage in large capital financing of oil and gas. But gradually things are changing and local banks are beginning to engage in participation of underwriting and financing of oil and gas projects through the leverage of consortium loans.
It was widely reported that, “la consortium of eight Nigerian banks led by UBA, as the lead bank, are in a $265million supplementary refinancing deal for ExxonMobil and the Nigerian National Petroleum Corporation (NNPC). The banks are United Bank for Africa Plc, Oceanic Bank, Standard Chartered Bank, Skye Bank, Zenith Bank, Bank PHB, Access Bank and Union Bank Plc. The deal, which was closed in London last week, marked a further sign of the increasing leadership role of Nigerian banks in oil and gas financing, where until recently they had largely played a more limited role.”
Some hydrocarbon companies with publicly traded stocks are issuing more stocks in order to raise capital in the local capital market. The growing oil and gas industries are raising money at the stock market. The West African energy giant, Oando Plc of Nigeria is set to raise the sum of 21 billion naira ($140 million) by selling shares in the capital market. The capital raised will be used to finance ventures in energy sector and "refinancing the acquisition of upstream assets, providing operational capital to fund the operation of the upstream business, and short and medium term investment in its gas and power business segment." Oando Plc headquartered in Lagos, Nigeria is the biggest indigenous energy firm in Nigeria that market oil products and involve in oil exploration at its acquired upstream assets, the segment that will receive the largest chunk of the proposed capital infusion. Oando Plc will raise the capital "through a Right Issue of 301,694,878 ordinary shares of 50 kobo each at N70.00 per share on the basis of one 1 new ordinary share for every 3 ordinary shares of 50 kobo each held as at the close of business on Friday, 18 December 2009." Two powerful and resourceful companies in the capital market: Vetiva Capital Management Ltd. and Stanbic IBTC Bank Plc will participate in the selling of the shares to raise the proposed capital.
Most of financing for the oil and gas projects are from international financial institutions particularly World Bank and International financial corporation (IFC). The Chad’s oil and gas industry was partially financed by the World Bank. But also the continental African Development Bank (ADB) is playing important role in the financing scheme of African based industries. Hasdrubal Oil and Gas Field Development Project in Tunisia was an example of ADB participation as a major player in financing the industry at the tune of $150 million. It was a beginning of local institution flexing its financial muscle in the African based projects.
“IFC has approved an equity investment of up to US$27.3 million in the Lion oil field and Panthere gas field offshore Cote d'Ivoire. The fields are located in Block CI-11, the most significant recent oil and gas discovery in Cote d'Ivoire, and their development is considered one of the country's highest economic priorities. Production of crude oil from the Lion oil field will help Cote d'Ivoire become self-sufficient in its domestic energy needs. Gas production will be used for power generation in the associated power project, in which IFC is also an investor.”
Another African based financial institution, The Africa Finance Corporation (AFC) is another major player in financing of oil and gas industry in Africa. “AFC is an African-led international financial institution whose mission is to improve regional economies by proactively assisting in the development and financing of infrastructure, industrial and other assets across the African continent.”
AFC is focused on financing and assisting industries in Africa including oil and gas industry. In the 1990s:“The Africa Finance Corporation (AFC) has made an equity investment of $20 million in Seven Energy, an indigenous oil and gas exploration and production firm focused on the monetisation of Nigeria's discovered but undeveloped gas reserves. The funds are part of a $200 million equity and debt raise by Seven Energy, and will be used for the development of reserves in the rich oil and gas-producing region of Nigeria. This unique transaction is geared towards the domestic use of gas, including power generation and supply to captive industrial clusters.”
“AFC is a lead investor in the US$240 million African-led Main-One submarine fibre optic cable project, which will provide much needed telecommunications capacity in West Africa. It is also the main African participant in a seven-year US$750 million syndicated reserves based lending facility to develop the landmark Ghanaian Jubilee Oil Field—one of West Africa’s largest deepwater offshore developments in over decade .The Africa Finance Corporation (AFC) has made an equity investment of $20 million in Seven Energy, an indigenous oil and gas exploration and production firm focused on the monetisation of Nigeria's discovered but undeveloped gas reserves. The funds are part of a $200 million equity and debt raise by Seven Energy, and will be used for the development of reserves in the rich oil and gas-producing region of Nigeria. This unique transaction is geared towards the domestic use of gas, including power generation and supply to captive industrial clusters.”
The lack of large capital financing is a major obstacle for oil and gas industry in Africa. For the industry to continue to be viable and buoyant, ways must be devised for readily availability of the capital in local market. African capital markets are improving and continue to be relevant in the oil and gas industry. Banks in the south of Sahara are now selling bonds to international investors and with that come a tremendous growth on the balance sheet. As the indigenous banks grow they can be able to acquire resources and liquidity for capitalization and financing of oil and gas industry