by Tunji Andrews

The excitement that was short lived on Thursday about the second largest down stream sector player in Nigeria, buying over the downstream assets on the largest indigenous upstream sector player Oando, had the financial markets momentarily confused on Thursday. The news initially broke directly from the official website of the Nigerian Stock Exchange, of Forte Oil’s preliminary negotiations over the purchase of downstream assets; however, no name was mentioned, as to where these assets might come from.

However, minutes after the release, news began to spread that the assets in question where actually the downstream assets of Oando. To confirm the story, YNaija, in reaching out to Oando PLC, was reliably informed that no deal of such was in place. In reaching out also to Forte Oil, we were told that Forte Oil could neither deny nor confirm the rumours.

From the press release from the NSE, it is clear that Forte Oil PLC has intentions to acquire some additional downstream assets to consolidate it’s massive investments into trucks it bought recently. Many would recall the acquisition of 100 trucks by Forte Oil this month, which was financed through equity and debt provided by Heritage Bank, is a significant addition to the over 1,000 existing trucks in its fleet.

Forte Oil had clearly made its downstream sector dominance, intentions clear by expanding its trucking fleet and the ongoing downstream asset aquisition would be a fulfilment of that intention.

Commenting, the Group Chief Executive Officer, Forte Oil, Mr. Akin Akinfemiwa, said at the unveiling ceremony of the trucks in Lagos that, “We are very confident that the acquisition of these 100 world-class product delivery trucks is a very strategic investment that will substantially increase our capacity to grow our revenue, profitability and ultimately maximise value for our shareholders as we move towards our mission of building a long-term successful company; boosting investor confidence by making Forte Oil Plc the investment of choice in Nigeria and globally.

On the part of Oando Plc coming through the very expensive acquisition of US oil producer, Conoco Phillips, onshore assets, market makers keep an eye on Oando, as to how it would treat it’s debt portfolio, with some pundits envisaging a return to the market to raise more capital.

With this in mind, Oando may consider a sale of it lucrative downstream arm and focus it’s strengths on consolidating on its new upstream strengths. Thus, many pundits continue to keep an open mind.

Emmanuel Chidiogo