15 May 2014, Lagos – The President of the Association for Advancement of the Rights of Nigerian Shareholders (AARNS), Dr.Faruk Umar, has said the production sharing contract (PSC) deal Transnational Corporation of Nigeria (Transcorp) signed with the Nigerian National Petroleum Corporation (NNPC) for the oil block OPL281 will boost the future performance of Transcorp.
Transcorp had in 2007 won the block in the 2007 bid round and paid signature bonus of USD30 million to the federal government.
With the signing of the PSC, Transcorp will now proceed with its drilling plans for this prolific block. The OPL 281 will be the centrepiece of Transcorp’s energy business and will provide the gas feed stock for its planned energy city in Delta State which will comprise its 1000MW capacity Transcorp Ughelli Power Plant, and proposed fertiliser and petrochemical plants.
Reacting to the signing of the deal between Transcorp and NNPC, Faruk told THISDAY at the weekend that it will boost the operations of the company and deliver better value to stakeholders.
“This is a good development as a shareholder of Transcorp, I am very excited and happy because it means good things to come in the future. Besides, this further attests to the leadership quality of the chairman of Transcorp, Mr. Tony Elumelu.We know this is the beginning of more things to come from the company,” Faruk said.
The AARNS had before now expressed confidence that the company would achieve a profit target of N30 billion for the year.
“Mark my words, with the kind of investments the company is making, the efficiency and determination of the board led by Elumelu and the commitment of management and staff, I am confident that the target would be achieved,” Faruk said.
According to him, with the power company being revamped and generating income for the company, the target would even be surpassed.
Faruk declared that he has not regret investing in Transcorp, disclosing that he had to even increase his holding when Elumelu bought into the company.
“Given his track record in reviving former Standard Trust Bank and transforming United Bank for Africa, I knew his coming into Transcorp would lead to improved fortunes and that is what we are seeing in the company,” he said.
The Chief Executive Officer of Transcorp, Obinna Ufudo, had told the shareholders recently that the first phase of the transformation of the company was to grow the business lines.
“In our first two years, what did was to stabilise the enterprise. We made investment in power plant and others. Our vision is for Transcorp to be leading Nigerian conglomerate in key sectors that can contribute to growth of the economy. We have chosen those sectors to be hospitality, energy and agriculture,” he said.
Ufudo said in the power business, the company will focus on concluding the rehabilitation of a number of identified turbines in toe to improve generating output at Ughelli plat to 700 megawatts.
“Our oil and gas business will witness a speedy take-off as we expect to finalise negotiations of the production sharing contract of OPL281 with the Department of Petroleum Resources. We will embark on aggressive drilling camping for commercial production before the end of 2014,” he said.
– This Day