Page 6 - DMEA Week 08 2021

DMEA POLICY DMEA

Former VP urges Nigerian refining privatisation

NIGERIA ATIKU Abubakar, the former vice-president government – has generally been resistant to the
of Nigeria, has urged the government to adopt idea of scaling back the state’s role in the oil and
plans for full privatisation of the country’s oil-re- gas industry. Now, though, APC is “facing real-
fining sector. ity” and has “embraced reason” by making room
In a statement, Abubakar commended the for privately owned companies, he said. This is
current presidential administration, headed by a positive development, since Nigeria’s hydro-
Muhammadu Buhari, for giving privately owned carbon sector has not always benefited from the
companies the opportunity to build oil-process- government’s management practices.
ing plants. But he also urged Buhari, who was his He reiterated his call for full privatisation of
rival in Nigeria’s 2019 presidential election, to go the oil-refining business, saying that Abuja ought
further and privatise the entire sector. to take this step sooner rather than later. Addi-
He also pointed out that his words were in tionally, he argued for making the sell-offs “as
line with his previous calls for reducing the state’s transparent as possible, as that is the only way to
footprint in the hydrocarbon industry. ensure that Nigeria reaps the greatest economic
“For decades, I have championed the priva- benefits from this policy.”
tisation of our economy and full deregulation Abubakar is a member of the right-leaning
of our oil and gas sector, amongst other sectors, People’s Democratic Party (PDP). He served
for greater service delivery and efficiency,” he as vice-president from 1999 to 2007, working
declared. under President Olosegun Obasanjo. He served
In the past, Abubakar noted in his statement, as head of the National Council on Privatisa-
Buhari’s party – the left-leaning All Progressives tion (NCP), which Obasanjo established in
Congress (APC), which now leads the federal mid-1999.™
INVESTMENT

Bids received for Aramco pipeline stake lease

SAUDI ARABIA SAUDI Aramco is reported to have received bids negotiations understood to have been carried
from at least eight parties to lease a stake in the out between Aramco and a group of local banks
company’s oil pipelines business. including Al-Ahli NCB, Al Rajhi, Riyad and
Non-binding bids have been received from Samba.
BlackRock, Canada-based Brookfield Asset DMEA learned in Q4 that talks cooled when
Management, Apollo Global Management, appetite for an agreement under previously dis-
Global Infrastructure Partners (GIP), Chinese cussed terms diminished amid concern from the
state-backed Silk Road Fund Co. and China conservative Energy Minister Prince Abdulaziz
Investment Corp., with initial proposals also bin Saud, with further due diligence deemed
submitted by Saudi and Emirati pension funds, necessary.
according to sources close to proceedings quoted While JP Morgan and Japan’s MUFG were
by Bloomberg. hired to advise on the deal, Aramco more
Aramco is now understood to be assessing recently brought in Moelis & Co. for the same
these bids for ‘Project Seek’ before creating a role and the transaction now appears to be near-
shortlist and inviting those firms to make bind- ing closure.
ing offers. A company source told DMEA that given
Bloomberg’s sources added that qualified bid- the size of the transaction, the deal was likely to
ders may join forces, with family-owned Saudi be financed through a syndicated loan and/or a
enterprises also considering making bids in part- bond issuance linked to revenue from the assets.
nership with investors. Meanwhile, sources have been quoted by
Downstream MEA (DMEA) understands Reuters and Bloomberg as saying that Aramco
that the deal would largely take the same form as is set to take out a loan of $7.5bn which will be
deals by Abu Dhabi National Oil Co. (ADNOC), offered to potential investors in its pipeline arm
with Aramco leasing out a stake in its pipeline as it seeks to ensure it can pay its Q4 2020 divi-
business for a period of 25 years and paying tar- dend of $18.75bn, with the company having to
iffs to use the infrastructure during that time. dip into its coffers for the previous two months
Aramco’s oil pipelines include the massive East- to cover its shareholder obligations.
West Pipeline that is currently being upgraded to In mid-2019, BlackRock and KKR leased a
increase capacity from 5mn to 7mn barrels per 40% stake in ADNOC Oil Pipelines $4.9bn, with
day (bpd). ADNOC leasing out a 49% in the ADNOC Gas
In October, it was reported that Black- Pipelines to a consortium backed by GIP and
Rock was in talks to acquire the stake, with Brookfield in June last year for $10.1bn.™

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