Barring last minute volte face, founders of one of Nigeria’s energy conglomerates, Sahara Group, would be heading to stock market for listing. This bold move has become imperative in the light of giant strides being undertaken by the Tonye Cole-led group. The stock market idea, though first flown a couple of years ago (2015 precisely), has been revived by the group in its renewed bold ambition to buy more oil fields to reach its 100,000 barrels per day-target within four years, from its present crude production of 25,000bpd.
To underscore its chutzpah which has seen it venture into continent-wide acquisitions, the group would not only be listing on Lagos State Exchange but also be raising funds through an initial public offer on London Stock Market. The group was on the verge going public with the IPO in 2015 but was held back when the market crashed and oil price plummeted. “The IPO is now back on the table. After we made the announcement then, the entire market crashed, oil prices went down, and so we put the plans on hold.” Tonye Cole, Sahara Group’s executive director said in an interview recently.
Cole did not offer information on the timeframe or the amount the group is planning to raise though; a source hinted TheCapital that the group was hoping to sell as much as 25 percent of its worth for around $850 million to $1 billion. “The option of buying more gas and oil blocs is looking brighter now, more assets have starting coming on the market,” Cole said.
Only hours ago, the Zambian government through Industrial Development Corporation (IDC) announced Sahara Energy Resources Ltd, a subsidiary of Sahara Group, as one of the short-listed five companies qualified to buy a majority stake in its only oil refinery, Indeni Oil Refinery, which was built in 1973. IDC has said it wanted a strong strategic equity partner that will improve the production capacity of Indeni Oil Refinery to a level that would meet the nation’s future petroleum demand. The IDC said in a statement the short-listed firm will now be asked to submit technical proposals on their bids.
Sahara and other Nigerian firms are responsible for pumping about 20 percent of the country’s total daily production of two million barrels. The indigenization and local content policy of the Federal Government of Nigeria has continued to boost domestic private companies’ presence in the oil and gas sector by buying assets from the likes of Royal Dutch Shell Plc, Total SA and Eni SpA.
While Sahara’s trade business is rather lucrative and the firm does hold several producing blocks including a 51% interest in the Tsekelewu marginal field, carved out of Nigerian OML 40 operated by the joint venture Elcrest Exploration and Production Nigeria (Scottish firm Eland Oil & Gas is also a shareholder) the group has continued to match its resolve to be a global player with giant strides.
