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Oando expresses interest in Port Harcourt Refinery
Michael Faloseyi, Abuja
The Federal Government�s aim of attracting oil majors into the privatisation of the nation�s refineries has received a boost as the Managing Director of Oando, Mr. Wale Tinubu, on Thursday disclosed that the company has submitted an expression of interest to acquire the Port Harcourt Refinery.
Tinubu said this in Abuja while enlisting the support of the company�s existing and potential shareholders to participate in the planned combined offer for subscription and rights issue to raise the capital base by N5 billion.
The combined offers are expected to open to public and existing shareholders in late August and would close in September.
Tinubu said that the shareholders approved the offers on June 25, 2004 but that its final details were being expected any moment from now.
About 60 per cent or N3 billion of the offer would be sought through a rights issue, while the remaining 40 per cent or N2 billion would be through public offer.
On the plan by the company to own a refinery, Tinubu said that Oando was interested in the new portion of the Port Harcourt Refinery which has capacity for 60,000 barrels per day.
The entire Port Harcourt Refinery holds over 45 per cent or 210,000 barrels per day of the country�s capacity of 445,000 barrels per day. The new portion of the refinery has capacity for 60,000 barrels per day, while the old portion has 150,000 barrels per day.
However, Tinubu said that the plan to acquire a portion of the Port Harcourt refinery with the submission of the expression of interest to the Bureau of Public Enterprise was being pursued as an alternative to building a new facility.
He explained that the cost of rehabilitating the acquired refinery would be a major determinant in the company�s decision, if it would go ahead with its plan to buy the refinery or to construct its own.
Tinubu said that if the cost of repairing an acquired refinery would affect the shareholders investment interest, the management would pursue the other option of building a new refinery.
He also assured that the company would surely go ahead to own its refinery through either of the options.
Apart rom Oando, two United States based refining companies, Commerce Petroleum and PetroEnergy had also indicated interest in the refinery.
Presidential Adviser on Petroleum and Energy, Dr. Edmund Daukoru, had in an interview with our correspondent said that the government would prefer to sell the refineries to oil companies with track recod.
Daukoru also said that the government would not foreclose the option of selling through open bid exercise if the oil companies would buy the refinery.
The Port Harcourt refinery is to be used as a test case for the government�s plan to the sale pf the remaining refineries.
The Punch, Friday July 30, 2004
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