• Sunday, February 25, 2024
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Steadfast pursuit of game-changing deal

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Things are about to change folks! That’s something that you will probably hear come out of an American radio broadcast. And when it does go out like that, then you had better believe that it would come upon you in real quick time. But this is not about how quick things tumble out. It is about how close they are to tumbling out and becoming a reality. It is, for want of a better expression, the story about being steadfast to a cause and keeping your eye on the ball while doing so.

Wale Tinubu, Oando’s group chief executive officer, knows that he is close to seeing the ink on the dotted lines of the ambitious deal of acquiring ConocoPhillips interest in Nigeria began in 2012, dry up for safe keeping in a vault controlled by his company. It is not such a surprise that he has stayed steadfast to this deal. His antecedent in pursuing the broad vision of the company since he led a team to acquire Unipetrol and changed its name to Oando, has stood him very clear relief.

Wale is a very energetic man. He is also an ebullient man. As a journalist who has followed this executive for a very long time, there is something about his tenacity and focus that makes you feel he likes to stay on a project until he sees light emerging at the end of the tunnel.

Wale Tinubu, group chief executive, Oando Plc
Wale Tinubu, group chief executive, Oando Plc

In 2008, at the World Economic Forum on Africa in Cape Town, South Africa, where I first met him, just months after my appointment to the editorship of this title, he was all over the place as a key player in driving the work of the Forum on the continent. At the plenary and some breakout sessions, he struck me as an executive who was interested, not only in keeping shareholders happy by pursuing growth and profits for his business, but also as a man who is interested in robust engagement on issues and passionate about how discussion and engagements can help foster conducive economic environment for progress and development of the continent and its people.

In Cape Town, it was Meka Olowola, then head of Corporate Communications at Oando upon running into each other that called out to me: “Editor, I didn’t know you were coming. You will have to meet Wale before you leave.” “Oh yes,” I had answered. “I think I like what you guys are doing at Oando and it’s a company I would like to follow up and see in our paper. I think it’s an interesting company to watch,” I added.

That meeting did eventually take place, but very briefly. The World Economic Forum on Africa, which incidentally is coming to Nigeria this year, is always a place where there is little time for much else, especially for a CEO who is himself a key player in the organising and staging of the event. Wale was very busy, but we had enough time for introductions and for me to let him know that I was keenly following the Oando story, especially what I perceived to be the broad vision that was emerging about where he and his team wanted to take the company. “Thank you,” he had said. “We are looking to build a company that is world class and with a culture that can stand it out anywhere it does business in the world.”

At that time, it was three years into Oando’s listing on the Johannesburg Stock Exchange. But it was a move that reinforced the broader vision of this executive and his team; a vision that is tied to creating an international character for the firm. Perhaps, you could say that this may have been driven by the areas of business that the firm was engaged in. If you were in the oil and gas business, as forward thinking chief executive officer, you would like to be seen playing in the international field and accepted as a recognisable participate in the oil capitals of the world. But the JSE listing was also an attempt to first make the point that Africa is an interesting market and with South Africa being a leading economy on the continent, getting listed on the JSE in 2005 was a statement-making moment about how Wale wanted Oando to be seen and appreciated.

“The truth is that the business grew bigger than the equity capital available locally. So the essence was that doing a dual listing in an international exchange gives us access to equity capital from other investors in other countries. We compete against the typical multinational oil company. Take a company like Shell, which is an Anglo-Dutch company. Shell is listed on several exchanges around the world and therefore can raise capital from these markets and can deploy such capital in Nigeria or in the North Sea for example.   Our logic therefore was that if we are going to build this great company we have to be able to meet the terms and conditions of listing in other exchanges and get international investors to buy into the Oando story through exchanges that are larger and have more access to capital than our exchange,” Wale Tinubu said in explaining why the company had made that move.

The Oando story is one that would someday be studied at some business schools around the world. One interesting aspect of it is that you could almost hear the chief executive say to anyone who cares to listen that his company has come into the oil business, even though it bought into a downstream player, and would therefore play in all of its aspects. That was what perhaps led it a few years ago to change its slogan to read “Africa’s leading integrated energy group.”

So what’s this integration all about? Wale says there is always this impression that Oando is primarily a fuels distribution company. “But we are the largest fuels importer into the country after the national oil company. We are also a big exporter of products out of the country. We have the largest local gas distribution system in the country. We have the Lagos Gas Pipeline system, which is almost 100km in length with almost 140 big industrial companies on it. We also have the Calabar Gas Pipeline, which is a 124km system. There is also the construction of the Rivers Gas Pipeline system for industrial customers.

Wale Tinubu describes his company’s service division as having the largest domestic swamp rig fleet in the country, which drills for Shell and Agip. It currently has a producing company which pumps about 6,000 barrels a day. “So the way we see our business is that the upstream is where you produce oil, the midstream is how you transport and distribute and the downstream is the end-user and retail business,” Wale said, to nail home the integrated energy group message.

Perhaps, as a company operating in an oil producing country, Wale knows how important it is to also play big in the producing business. It is the reason why he elected to lead his company into what is clearly a game-changing deal to buy the interest of ConocoPhillips in Nigeria in 2012.

This transaction has taken an awful longtime, but it is clear that Wale is coasting home now. Once that business is done, Oando will definitely not be the same again.

I am sure Wale goes to sleep every night seeing the 50,000 to 60,000 barrels a day that Oando will be producing once the deal is done!

By: Phillip Isakpa