- Independent Marketers May Divest Fuel Retail Assets
Propetrol Limited, an indigenous oil and gas company, has said there will be a lot of divestment of assets within the fuel retail market by independent players who do not have the supporting infrastructure and financial capacity to cope with the current challenges.
The Managing Director and Chief Executive Officer, Propetrol, Mr. Harry Ebohon, said foreign exchange challenge and increasing cost of financing product importation would put so much pressure on marketers’ bottom line.
He said at a press briefing in Lagos that major marketers started the trend of divestment last year when Oando sold a stake in its marketing subsidiary to the trading company, Vitol; Forte sold a part of its business to Mecuria, and Nipco acquired 60 per cent interest in Mobil Oil.
“Propetrol will be positioning to acquire any of these assets that become available in the market,” Ebohon said.
He said the company commenced operations 15 years ago by providing logistic services to downstream petroleum marketers who relied on their trucks to move products to every part of the country.
“But we decided to play a more prominent role in the industry and increase our footprints and investments across the oil and gas value chain,” he said, adding that they later went into retail marketing franchise with Oando.
He said the company invested in the maritime logistic end of the business to ensure efficiency and reliability in supply and distribution of petroleum products.
Ebohon said, “Our vessels are a key indication of tangible investment in this regard. Plans are also on the way to construct a storage facility in Port Harcourt.
“We expect to see some divestments in distribution assets this year. There are over 129 storage facilities in Nigeria today with over 70 in Lagos alone. A lot of them are presently idle and with the financial sector weakness we see in the economy, there will be pressure on some marketers to divest.”
According to him, 90 per cent of the nation’s pipelines are currently non-operational and as such the Nigerian National Petroleum Corporation should be concluding plans for the concession of these pipelines.
“Propetrol will be positioned to take advantage of these opportunities as they play out. Propetrol is also in the forefront of the companies that will move from road transportation of products to rail transportation as our rail infrastructure improves,” he said.
The Propetrol MD said growth would be achieved by entering markets with good growth curves such as the Liquefied Petroleum Gas market where consumption was expected to grow by 60 per cent to one million metric tonnes per annum.
He said, “Today, we are one of the leading indigenous players in the bunker supply sector in Nigeria, providing services to international oil companies, national oil companies, marginal field players, rigs, platforms, and dredging companies, among others.“In consolidation of our market leadership in this niche, we have entered into partnership with international companies to offer even more robust services to our customers in markets where we are not present.
Ebohon said the company would announce some partnerships in the next few weeks, adding, “We are partnering a major international player in the bunkering industry to provide the quality of products and services that the Propel brand has become known for to our international customers in markets where we are not physically present.”
