Jubril Adewale Tinubu’s winning streak
“It is chance that makes brothers, but hearts that make friends”, said a philosopher several years ago. And when Jubril Adwale Tinubu, Omamofe Boyo and Onajite Okoloko teamed up in 1994 to set up Ocean and Oil Services Limited to supply diesel and Low Pour Fuel Oil (LPFO) to various shipping firms and offshore exploration companies in Nigeria, they probably had no idea that twenty years down the line, their humble investment would become a multinational conglomerate worth millions of dollars spread across five West African countries.
The three partners bought their first vessel MT Carolina anchored in Bonny in the mid-nineties, to supply diesel to off-shore companies from the Port-Harcourt Refinery. Six years later, their fleet had grown to seven ships and by the year 2000, when the government decided to sell its controlling 60% stake in the defunct Unipetrol Plc, an integrated downstream oil marketing company, the three friends made an audacious bid for it.
The former Managing Director of the old Unipetrol Plc at that time, Mallam Yusuf Ali, was a seasoned technocrat who once served in the NNPC. When he received word that Ocean and Oil Services had made a bid for his oil firm, he laughed them to scorn and waved it off as a bad joke.
This is because Unipetrol at that time was already a top quoted company on the Lagos Stock Exchange while Ocean and Oil was just an upstart, trying to find its feet in the downstream sector.
His former aides recalled that the bid reminded them of a tilapia fish trying to swallow up a whole whale! To their surprise, Ocean and Oil Services successfully paid for the shares, and took over the company with the help of its foreign technical partners, Compagnia Espanola De Petroleos (CEPSA), the second largest oil group in Spain.
Three years later, when Agip Petroli International BV of Italy decided to divest from the downstream sector, the three friends bought over the foreign company’s shares and added Agip Nigeria Plc, the company’s local subsidiary to their portfolio, using a 9.2 billion naira four-year syndicated loan from a consortium of local and international lenders, to finance its purchase.
The newly acquired companies were merged and renamed Oando Limited. By 2005, Oando Plc had secured a cross border listing on the Johannesburg Stock of Exchange (JSE) in South Africa. Their dream of breaking into the international market was becoming a reality.
Subsequently, some other acquisitions were made in rapid succession, including a local gas pipeline company through Tinubu’s leadership, Gaslink a subsidiary of Oando Plc successfully phased and executed the construction of about 100km of natural gas pipeline distribution network from the Nigerian Gas Company city gate in Ikeja, to cover the greater Lagos Area including Ikeja, Apapa and their environs.
Gaslink currently delivers over 60 million standard cubic feet per day (mmscf/d) of gas to over 150 customers on the greater Lagos gas distribution network grid, with the capacity to deliver up to 101 million standard cubic feet per day (mmscf/d).
Two years later, Jubril Wale Tinubu led the listing of the company’s upstream subsidiary, Oando Energy Resources on the Toronto Stock Exchange (TSX).
Oando also recorded a feat in 2007 when it built the first 12.5MW IPP Power plant for Lagos State government, which has safe the state government over 3.5 million USD in energy bills.
But that paled into insignificance in 2014 when it executed its most ambitious acquisition till date was when the world witnessed the close of his best transaction, the acquisition of ConocoPhillips Nigeria businesses for $1.5 billion, fortifying Oando’s position as the largest indigenous independent oil & gas producer in Nigeria with a current net production of 53,145 boepd (Barrels of Oil Equivalent per Day) and 230.6 mmboe (Million Barrels of Oil Equivalent) of 2p reserves and 536.8 mmboe of 2C reserves.
From only one vessel it acquired in 1994, Oando now boasts of six subsidiaries with interests in at least 10 oil blocks in Nigeria valued at about $600 million USD, 650 fuel stations spread across Nigeria, and other West-African countries as well as lube blending plants, fuel depots, oil rigs and other impressive assets.
Their winning streak was halted briefly two years back however, when Oando Plc announced a loss of NGN184 billion naira in the 2014 financial year. But at the company’s 38th annual AGM, 2015, the man with vast knowledge in the sector assured shareholders that the company would rebound to profitability in 2016 and continually create value for shareholders.
True to his words, the company declared N4.1billion profit after tax in the first quarter of 2016. It is the stuff from which legends are made.
Recently, Tinubu concluded a $210million recapitalization of Oando Downstream by HV Investments, a joint venture owned by Helios Investments Partners, a premier Africa focused private investment firm and the Vitol Group (“Vitol”), the world’s largest independent trader of energy commodities.
With this, Tinubu has succeeded in rewriting the story of Oando, leaving many of his competitors in wonderment.
The investors Vitol a Dutch oil trading giant, and Helios Holdings are well-respected multinational corporate players with deep pockets. This is pretty impressive for a company owned by three friends, who started business with just one oil vessel acquired in 1994.
That is not all. Oando is currently planning to establish a 360,000 capacity refinery estimated at NGN 254 billion naira in Lagos, Nigeria. It would include a 210,000 metric tonnes fuel terminal.
Industry watchers confirm that the Front-End Engineering Design (FEED) of the project is almost completed, and it is likely to be located at the Lekki Export Processing Zone (LEPZ), not far from Dangote’s proposed multi-million dollar refinery.
On the drawing board, are plans for a second refinery, which will be launched in Port-Harcourt when the first one takes off in Lagos, Nigeria. Everyone is talking about the deal and waiting with bated breath, for the next move from Jubril Adewale Tinubu. It promises to be exciting.
Elvis Afam is a young and topflight businessman from Delta State. He is the Chairman/Managing Director to Elvaton Group of
He was born on December 19, 1962. His father, Olusola Abubakar Saraki, was a revered political leader, and former senate