AP Floats New Firm for Upstream Business
Records N34 billion turnover
By Mike Oduniyi
Major oil marketing company, African Petroleum (AP) Plc, has incorporated a new subsidiary, African Petroleum Oilfield Services, (APOS) to operate in the upstream sector of the oil industry.
Making this known, AP Plc Chairman, Mr. Peter Okocha, told shareholders at the company's 25th Annul General Meeting (AGM) held recently, that the new oil services firm, which is wholly owned by AP, was floated to tap the abundant opportunities in the area of oil servicing business.
According to Okocha, the move was to avoid the "various unfortunate management, financial and operation lapses discovered in the Star/AP Joint Venture, a partnership between AP and Star Oilfields Supplies and Services Limited"
"Besides its oil services operation, the company is now the sole distributor of MI Production Chemicals used for crude oil production in Nigeria.
"Efforts are currently in top gear to improve on and capture new relationships towards surpassing the feat achieved by our contemporaries in this area," said the AP chairman.
The Star-AP joint venture ran into stormy whether last year following a hot dispute between AP Plc and the former management of the oil service firm. AP had alleged mismanagement on the former management to the tune of N3.7 billion.
A new management was put in place in May 2003, in the bid to shore up the company's fortunes.
According to the results posted by AP Plc, the oil marketing firm recorded a turnover of N34.395 billion and a profit after tax of N610.85 million during the financial year ended December 2003. This compared to N28.99 billion turnover and N2.156 billion profit made in 2002.
"Our trading profit increased from N1.23bn (2002) to N1.78bn in (2003). At the insistence of the Auditors, a 50 percent provision was made on our investment in Star-AP Joint Venture," said Okocha.
"We are confident that this would be reversed in the near future. The fortune of the company is being turned around with the setting up of AP Oilfield Services and a new Management team in place," he added.
The board and management of the company he said, was is determined to build a solid foundation to place it strategically to compete favourably in the downstream sector as well as meet shareholders expectations, he stated.
According to him, AP's acquisition of a 45 percent stake in IMB International Bank Plc, which made it a major investor in the bank, was part of the numerous business potentials presented by deregulation of the downstream oil sector, and was to lay a solid foundation for growth and profit.
The report showed that AP, which was rocked by debt overhang of about N25 billion since 2001, got a waiver of N1.006 billion from banks last year. It had got same reprieve of N4.388 billion in 2002.
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