RE-POSITIONING AFRICAN PETROLEUM (AP) FOR OPTIMAL GROWTH

This is no doubt whatsoever that Mallam Zira Maigadi has played a very major in the radical transformation and rapid modernization of AP. Between October 2001 and March 2002, Mr. Maigadi was the Treasurer of the African Petroleum Plc. Having established his trademark for excellent financial management at the AP, he rose to become the Finance and Accounts Manager as well as the Head of Finance of the company in 2002 from where he became the Executive Director, Finance in April 2004, a position he held until April 6, 2006 when he became the Acting Managing Director of the AP as well as the Chairman of a four-man Executive Management Committee that ran the daily affairs of the oil giant between that time (April and September 8, 2006). The gigantic strides of Zira Maigadi at AP Plc between April 2006 and now can best be appreciated if the story picture of the place of African Petroleum Plc in the down stream sector of the Nigerian economy in December 2005 is compared with its super success in June 2007.

It is imperative to underscore the fact that in 2005, AP was almost out of business when NNPC suspended the company from lifting oil products from all NNPC depots throughout the country as a result of its debts portfolio of AP to the NNPC. To worsen a very acidic business situation during this period, banks were generally running away to do business with AP. The situation was so bad that the management of AP at the time had no options than to rely on its lubricants plant to survive. Maigadi has been able to generally grow the sales of AP’s products by a monthly average of 11.82 per cent over March 2006 performance level. Also, the net branding of AP’s aviation fuel business as well as its expansion and promotion to an enviable level of service delivery and market leadership to Maigadi and his group have turned these around for the best in AP. Again during this period in question, AP gave its retail outlet network strategic attention to deepen its sales and market share and the company’s Apapa lubricating oil plant underwent a complete upgrade for capacity expansion and efficiency. In a related vein, Maigadi and his management team ensured that the company’s human capital is adequately exposed to relevant training with a view to equipping them for exceptional , cutting-edge performance through sharpened skills and competencies. For the first time in the history of the company, brand new operational cars were bought for the sales representatives across the nation as well as other key officers, which in turn tremendously boost quality of business being undertaken by AP. In a related development

In the same token, he has continued to ensure that his management team gives efficient product sourcing strategic focus as AP is poised to assume distinct leadership in fuels procurement and distribution nationwide. Under the leadership of Maigadi, AP has been able to reduce over dependence / reliance on NNPC for products allocation. Since he assumed the leadership of AP, the company has engaged in strategic importation of petroleum products in order to adequately service its retail outlets nationwide at more competitive prices. It should be added that, Maigadi led management team has taken AP to an enviable height in its corporate image within the past one year. As it should be expected with the massive and consistent business volume by the company between April 2006 and June 2007, and the attendant fertilization of its shares price which moved from N32 to N80 between April 2006 and June 2007, AP is currently the toast of many investors including those banks that would not want to do any business with the company only 18 months ago. In the same way, the retail outlet’s renovation have been vigorously pursued to lift AP’s stations across the nation to a befitting aesthetic and service delivery levels, within this same year.

Similarly, the company under the able leadership of Maigadi successfully undertook the re-launching of its premium lubricating oils like Visco static (super v) visco 2000, AP heavy duty SAE 40, gear oil e90, its Energol and Vanellus grades. To drive home the fact of AP’s super success in the oil industry under the leadership of Maigadi in the past one year, the company achieved another milestone as it embarked on the win-win consumer sales promotion from 6 th December 2006 to March 7 th, 2007, to reward its customers for their unwavering loyalty over the years to lubricant brand from AP’s stable. In the sales promotion draw which took place on April 5 th, 2007, AP gave out the star prize of a brand new Nissan Sunny Saloon Car and ten consolation prizes of Jincheng Motorcycles to winners .

The only snag in the success story of AP is the horrendous way and manner the AP shares were given to Zenon Oil, with recourse to the due process and rule of law. There is no doubt whatsoever that the so called privatization exercise under the administration of former president Olusegun Obasanjo is fraught with all kinds of sharp practices, shady deals and under-the-table-practices. It was for these reasons for instance, that the sale of the Port-Harcourt and Kaduna refineries to questionable group known as bluestar was summarily reversed by the Umaru Yar’Adua’s government. These very germane public utilities were more or less handed over to this group by Obasanjo without follow the due diligent procedures. It is also germane to underscore the fact that, the sale of NITEL to Transcorp generated a lot of furore which has refused to go away. Not only this, the sale of Eleme Petro-chemical, NAFCON, the Steel Rolling Mills in Delta, Katsina, Jos and Ajaokuta, the Tools and Machines Company in Oshogbo, The National Theatre, International Trade-fair Complex, The Tafawa Balewa Square, Nigeria Airways, just to mention but a very few are all enmeshed in a great mess, as there are serious questions about the privatization of the corporation. What took place during the dark days of Obasanjo pseudo-democratic rule was the reckless and wanton sale of the collective patrimony of the Nigeria people, to few people at the corridors of power and their businessmen friends. The due process, rule of law and collective interests of the Nigerian state was not taken into consideration. Obasanjo behaved like a maximum ruler who will be in power forever, but he has forgotten that, whatever has a beginning will surely come to an end one day, political office is for a while, power is ephemeral.

Hence, the same way and manner the Yar’Adua government reversed the rapacious sale of the Port-Harcourt and Kaduna refineries in the over interest of the country, so also, the Federal Government should reverse the sale of AP shares. The AP shares was sold indoors, it was not transparently sold. If government felt that the AP shares belong to NNPC, how did they get the share in the first place? AP shares were acquired because AP owed NNPC N1billion. For them to now sell the shares as if they were selling their friend’s car, cannot be done. They should have been advertised and asked people who are interested to tender for it. They may have got better offers. It is not that the share must not be sold, but in selling them they must advertised and the due process must be followed. Even limited liability companies don’t sell there shares like that these days. Let people who are interested tender for it. There could have been competition on the shares and a better offer made to government. If they had advertised the sale of the shares, government could have sold it for 30billion and would have been added to the pension fund of NNPC.

The controversial 28.7 per cent equity interest of the NNPC in AP Plc was sold to Zenon Oil. Interestingly, the sale came barely three days after the National Council on Privatization (NCP) met, with a consensus that the controversial shares be sold by the BPE through a competitive bidding to Nigerians. President Olusegun Obasanjo had stopped the sale of the affected AP shares to Global Fleet and a chain of other companies. The NNPC had acquired the equity interest through its staff pension fund in 2005 through a debt-swap of over N10 billion AP owed the corporation. This acquisition was subsequently gazetted and slated for sale to the Nigerian public. But the unilateral transfer of the NNPC equity to Otedola may have set him on collision course with Asset Management Company Limited (ASSEMAL), a related company to Afribank Nigeria Plc. ASSEMAL had bought the 30 per cent shares divested in 2005 by AP former core investor, Sadiq Petroleum Limited, following the row with the NNPC over the debt-for-equity demand, a development that conferred on ASSEMAL the status of a core investor. The earlier arrangement among the parties (AP, ASSEMAL, NNPC and the Federal Government) was that ASSEMAL would get the NNPC’S shares in AP were to be disposed. Alternatively, the BPE would sell the shares to the Nigerian public. Subsequently, Afribank’s ASSEMAL, which already had some shares in the oil marketing company, bought over 120 million shares of AP Plc worth about N6 billion, which was crossed in about four, deals on the Exchange. Sadiq Petroleum had emerged the core investors in AP buy purchasing the 30 per cent equity divested by the Federal Government in 2000 under its privatization programme. Sadiq, however, ran into murky waters when it emerged later in 2001 that AP was indebted to banks and the NNPC to the tune of N26 billion. The core investors protested the claims and accused the BPE of misleading it and concealing the facts during privatization process. At a point the Federal Government constituted a tribunal of inquiry on the debt matter.

However, while the tribunal headed by Justice Edet Robert Nkop (rtd) submitted that the debt claims were wrong, the NNPC still maintained that the oil marketer owed it N10 billion. But because of the frosty relationship between Obasanjo and Atiku, Okocha of Sadiq Petroleum was forced to resign his chairmanship position in AP and Sadiq Petroleum relinquishing its shareholding in the oil marketing company.

It is in this respect that the Independent Petroleum Marketers Association of Nigeria (IPMAN) has said that, “ government should intervene in the alleged illegal sale of the Nigerian National Petroleum Corporation (NNPC) shares in the African Petroleum to Zenon Oil saying it was a breach of the law. Quoting the official Gazette No. 20 volume 93 of the Federal Republic, the independent marketers described as lacking in transparency and due process. No advertisements were placed before the sales were effected and as it were, even the BPE denied any knowledge of the transaction. It is on record that Global Fleet Group purportedly paid the sum of N17.5 billion for an ascertained number of shares which sale was eventually withdrawn or cancelled. Surprisingly, Zenon Oil paid N17 billion for the same number of shares with a whooping N500 million difference. We want to believe that the transaction is still open and therefore pray that the government intervene and order that same be stopped and reorganized to give more Nigerians (IPMAN) inclusive the right and opportunity to participate in the public sale of the African Petroleum Plc shares”. Similarly, weeks after the controversial sale of the Nigerian National Petroleum Corporation (NNPC) shares in African Petroleum (AP) to Zenon Oil, the wrangling over the hurried transaction has risen like a phoenix from the ashes, throwing up more questions and condemnation from stakeholders. The shareholders Trustees Association has condemned the sale in its entirety, insisting that President Obasanjo sold the precious shares to himself. According to the association, “this is one of the greatest corrupt acts of Obasanjo has done in eight years as president. Femi Otedola, managing director of Zenon oil, has always been the front used by President Obasanjo to execute deals at NNPC”. The association further condemned the haste with which the president sold the AP shares to his front, insisting that Otedola could not have won the bid if due process had been followed. According to the group, “the sale of 28.7 per cent shares has called to question President Obasanjo’s commitment to fight against corruption. For one, if the president were transparent, he would have routed the sales through the Bureau of Public Enterprises (BPE), which would have been the legal and due process. Mr. Jimoh Ibrahim, whose company, Global Fleet Group, already operates 140 AP fuel stations out of its total 207 across the nation, had already paid N17.5 billion but President Obasanjo overruled the transaction and offered the prime shares for N17billion”.

In a related development, the chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, described the transaction as fraudulent, adding that it was sending wrong signals to the international community as Nigerians would be seen as dubious. He warned the new investor not to go near AP as the shareholders would resist the entry of Zenon into AP. He also accused the Nigerian Stock Exchange (NSE) of derailing from transparency by not allowing the shares to go existing shareholders. Assemal, the core investor in AP to the Afribank company, was expected to have been given preference over all other bidders in the latest deal after Barrister Jimoh Ibrahim, the Group Managing Director of NICON and Chairman of Global Fleet Oil and Gas Limited, who wanted to buy the NNPC’S interest, was frustrated out of the deal when President Olusegun Obasanjo cancelled the offer made to him some months ago. It is on this basis that capital market watchers are criticizing the sale of Zenon. It is for these reasons that the Yar’Adua-led government must reserve this illegal sale and do what is right in the overall interest of the country.

 

Saliu Iyanda,

No 170 Ibrahim Taiwo Road,

Ilorin ,

Kwara State , Nigeria .