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NNPC head expects major downstream interest
NIGERIA
LAST week Nigerian National Petroleum Corp. (NNPC) managing director Mele Kyari spoke about throwing a lifeline to Nigeria’s ail- ing downstream sector. This week, he has been talking about getting two of the world’s largest oil companies involved.
“They are ready for any investment oppor- tunity that is low risk,” he was quoted by S&P Global Platts as saying on October 1 about the apparent interest from Saudi Aramco and Abu Dhabi National Oil Co. (ADNOC).
While Nigeria is a major player in the global oil and products markets, it is hard to imagine that either company would genuinely view an investment in the Nigerian downstream sector as low risk.
However, fuel marketers have had a great time in Nigeria for years and the country’s coastal infrastructure perhaps makes it the most obvious point for fuel imports into West Africa.
However, given that Kyari spoke recently about improving domestic refining capabilities to bring about fuel independence, his tune has changed significantly if he views further reli- ance upon foreign fuels as an improvement for the Nigerian downstream.
Kyari was reported to have met with ADNOC CEO and UAE Energy Minister Sul- tan al-Jaber, saying that part of the company’s plan was “to have a presence in West Africa”.
He added: “We have upstream opportuni- ties, midstream opportunities, downstream opportunities. It is up to them to select where they want to be, but we would like them to be in midstream.”
Platts quoted Kyari as saying that Aramco was “quite keen on getting the opportunity to supply gasoline to West Africa and we will pro- vide them with the right platform ...We are the largest importer of gasoline in West Africa. It is a clear opportunity for them.”™
Engen reportedly headed for IPO in H1-2020
SOUTH AFRICA
ENGEN, a petroleum refiner and retailer that operates in seven African countries, is report- edly gearing up for an initial public offering (IPO) of stock.
Sources familiar with the matter said last week that representatives of Engen’s two share- holders – Malaysia’s Petronas, which holds 74% of equity in the company, and Phembani, a company founded by South African business- man Phuthuma Nhleko that owns the other 26% – had already begun discussing the terms of the IPO.
The issue will probably take place on the Johannesburg Stock Exchange in the first half of 2020, they told Bloomberg.
The sources, who spoke on condition of anonymity because the downstream operator has not made its plans public, reported that the parties had not yet decided how much stock to offer. They also noted that Petronas had appointed JPMorgan Chase & Co. to serve as its advisor for the IPO.
Engen hopes to use the proceeds of the stock issue to cover the costs of expanding its chain of filling stations and upgrading its 135,000 barrel per day (bpd) oil-processing plant in Durban, the sources said. The company is currently valued at more than ZAR 40bn ($2.6bn), they stated.
As of press time, neither Phembani nor
JPMorgan Chase had commented publicly on reports of the Engen IPO. For its part, Petronas has remained mostly silent. When contacted by Bloomberg, the Malaysian company said: “Should there be an IPO exercise, the market will be informed.”
Engen is the largest fuel retailer in South Africa and also operates filling stations in Bot- swana, Ghana, Lesotho, Mauritius, Namibia and Swaziland. It was founded in 1881 and posted a net profit of ZAR 1.8bn ($117mn) on revenues of ZAR 82.5bn ($5.4bn) in 2018.
Earlier this year, Engen exchanged part of its retail network – that is, more than 225 branded filling stations operating in eight African coun- tries (Zimbabwe, Zambia, Tanzania, Rwanda, Reunion, Mozambique, Malawi and Gabon) – for a stake in Vivo Energy. The deal served to expand Vivo Energy’s chain to more than 2,000 filling stations. ™
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Week 40 09•October•2019