ABUJA�Nigeria has selected two core investors to buy a majority of the shares it plans to divest from two state-owned oil companies�National Oil & Chemical Co. and African Petroleum.
The Nigerian government took over majority shareholding of the two companies in 1976 from units of Royal Dutch/Shell Group and BP, respectively, as part of measures to protest the continued support of apartheid in South Africa and colonialism in Zimbabwe by the British government.
The director-general of the government's bureau of public enterprises, Nasir El-Rufai, disclosed in Abuja the government's shares in National Oil, Royal Dutch/Shell's former Nigerian unit, would be bought by Conpetro Ltd., while those in African Petroleum, formerly BP Nigeria Ltd., would be acquired by Sadiq Petroleum Nigeria Ltd.
Conpetro is owned by Consolidated Oil, an indigenous exploration and production company in the upstream sector, the Petroleum India Corp., and other Nigerian investors, while Sadiq Petroleum is a wholly owned indigenous company.
According to the arrangement, Conpetro would buy the Nigerian government's 205.8 million shares in National Oil for $741 million, while Sadiq Petroleum would pay $230 million dollars for the government's shares in African Petroleum.
El-Rufai made the announcement after a meeting of the National Council on Privatization that was held to ratify the selection of the core investors.
He said that the technical committee, having applied all the subjective measures of technical capability and managerial capacity, recommended Engen Petroleum Ltd., Afro Oil Services Ltd., and Conpetro for consideration by the council.
Conpetro offered the second biggest price of 36.02�/share for National Oil, beating four other contenders, Afro Oil Services, Petrochem, Solgas Petroleum, and Engen, to emerge as core investor for National Oil.
He said that Solgas Petroleum, which placed the biggest offer of 36.5�/share, did not get the nod of the council because of fears its post-acquisition plans for the oil company were not feasible.
Some of these plans included the development of 145 modern service stations across Nigeria and West Africa over the next 5 years, and the acquisition of an independent power plant license to develop power generation.
Solgas also stated that it had plans to export low-sulfur fuel oil and acquire a substantial stake in a major road haulage company, to improve the supply and distribution of petroleum products from its service stations.
El-Rufai noted that while these were grand plans for National Oil, the technical committee feared that as core investor, Solgas would be spreading itself thin in order to achieve these plans.