NDPR Has Demystified Refining in Nigeria, Says DPR
The Department of Petroleum Resources (DPR) has said an indigenous oil company, the Niger Delta Petroleum Resources Limited (NDPR), has demystified local refining of petroleum products.
This is as the regulator urged Nigerians to invest in the downstream oil and gas sector to boost crude oil production capacity of the country.
Director of DPR, Auwal Sarki, spoke to journalists at Ogbele community in Ahoada-East local government area of Rivers State shortly after an inspection by DPR team of ongoing expansion work of Ogbele Refinery operated by
NDPR, recently.
The DPR team, accompanied by top officials of the NDPR, also visited the Ogbele oil and gas well-heads, flow station and power station.
Sarki stated that with the success story of the Ogbele Refinery, there are hopes that it would no longer be difficult for Nigerian refineries to be brought back to work or their production capacity improved.
He added: “The essence of this visit is to confirm the capacity of a Nigerian company to be a fully integrated oil and gas company.
“We came here, observed and confirmed that NDPR is fully integrated oil and gas company; from well-head to crude oil and gas production, to crude oil and gas processing and refining, to distribution and marketing.
“These confirmed that the country is ready and we have a company that has made the difference but has become gamechangers in the business. We are delighted.”
He added: “Currently, the capacity of this company is 11,000 barrels per day and we see the potentials for it to be increased. This is just to say that the issue of refining in Nigeria had been demystified.
“If can have this capacity, refine this capacity and produce the products, then there is not something difficult to bring back the refineries to work or improve the existing capacity.
“The NDPR started with 1,000 barrels per day capacity, it increased with 5,000 and additional 5,000. Who knows?
“This has the potentials to game-change the entire products supply in the country because the volume the produce will provide a lot of security especially in terms of diesel and other essential products that we consume.”
Sarki said Nigeria could attain self-sufficiency in gas processing and refining, create wealth and value and strengthen production security.
He said the DPR would offer required license to investors in the oil sector, adding that DPR’s interest “is to see money from royalty not from penalty to guarantee business and open opportunity”.
“The private sector should invest in this initiative because our observation today, confirmed that this refinery is a masterpiece that has increased production of crude and other essentials.
“Starting with initial production of 1,000 barrels per day; today, they clocked 11,000 barrels per day.
The plan by Chemical and Allied Products (CAP) Plc and Portland Paints and Products Nigeria (PPPN) Plc to combine their respective businesses received a major boost last week as shareholders of the two paints company have approved the merger.
The approval was given at the court-ordered meeting (COM) in Lagos, which was also hosted virtually online, which set the final phase of the merger on its concluding processes.
According to the scheme of merger approved by the shareholders, shareholders of PPPN will receive one CAP share for every eight ordinary shares of PPPN or a cash consideration of N2.90 for every PPPN share.
The cash consideration represented 41 per cent premium on the last trading price of PPNN on October 23, 2020, being the last trading day before the announcement of the merger. Subsequently, PPPN will be dissolved without being wound up, delisted from the NSE and its shares registration at Securities and Exchange Commission (SEC) withdrawn.
Managing Director, CAP, Mr. David Wright, said the business combination would scale up post-merger CAP from its second position in the paints industry to the first position.
He said the merger would lead to many benefits for the company and its stakeholders including expanded product offering, increased owned brand portfolio, diversified revenue base and broader distribution capabilities, all which will enhance customer satisfaction and lead to greater returns to shareholders.
Wright said the merger was a value-maximising opportunity to shareholders as well as holding out enormous opportunities for customers and other stakeholders.
According to him, the enlarged CAP will control about 15 per cent of the Nigerian paints market, the largest by any company in the highly fragmented sector while enhancing its leadership with 26 products offerings, an all-inclusive product portfolio that includes decorative, industrial, marine and protective paints as well as distribution network of 91 stores across 32 states of the federation.
The MD noted that CAP which plays in the premium and standard paints and coatings with globally recognised brands such as Dulux and Caplux, has enviable track record as a pioneer, having pioneered the colour centre concept in Nigeria in 2005, alongside other innovations.
He expressed optimism that the merger between CAP and PPPN would be concluded before the end of this quarter, having received all preliminary regulatory approvals.
Wright added that the completion of the merger will impact substantially on the post-merger CAP with access to more capital, opportunity to invest in its human resources, a stronger balance sheet and stronger footing as a leading paints company in Africa.
He said CAP will continue to explore opportunities for future growth through different routes including internal growth drives and acquisitions, assuring that the company as well positioned to maintain its leadership.
On her part, MD of PPPN, Mrs. Bolarin Okunowo, said the company supported the merger because of the value offerings including shareholder value creation, enlarged entity, enhanced decorative paints business and increased retail footprints.
According to her, PPPN holds a 35-year record of manufacturing and selling industrial, marine, decorative and protective paints for the construction and oil and gas industries in Nigeria, pointing out that the company’s flagship, Sandtex, is renowned for its exceptional quality for residential commercial and industrial buildings.
She said the merger would create opportunities for shareholders and stakeholders on both sides as the two companies have complementary synergies that would lead to greater returns.