30 October 2014, Abuja – The Nigerian National Petroleum Corporation (NNPC) and its partners, Total and Eni, have agreed to take over the shares that were left behind by American energy corporation, ConocoPhillips (COP), which recently left the multibillion dollar Brass Liquefied Natural Gas (LNG) project.
Chairman of Brass LNG, Dr. Jackson Gaius-Obaseki said on Wednesday in Abuja that NNPC, Total and Eni have now agreed to take up the 17 per cent shares that COP left behind at its exit from the project.
He however said that the shareholding restructuring process was being worked out and that it will take quite a while to conclude especially with considerations of standards in transfer and acquisition of shares.
It will be recalled that the shareholding structure of the Brass LNG shows that NNPC holds 49 per cent, Eni, 17 per cent and Total, 17 per cent. The remaining 17 per cent which is now being taken up by the trio was held by COP.
The development may have also put paid to expectations that a new partner to take over from COP will be shopped for by the promoters.
Obaseki said at a courtesy visit to the Group Managing Director (GMD) of NNPC, Dr. Joseph Dahwa that the decision of the shareholders to acquire COP’s 17 per cent equity in the project has saved the board from having to shop for a replacement.
He explained that with such commitment, the project was still on track to achieve its Final Investment Decision (FID), not minding COP’s exit.
Obaseki also noted that but for the resourcefulness of the remaining shareholders; the exit of COP from the project would have perhaps led to its wind-up.
“We went through a very tough time with the exit of ConocoPhillips because the provision of the shareholders’ agreement would have been that we would deadlock and have to wind up the company and I knew that it would have been a nightmare if we went that way.
“I had meetings with the honourable minister and she was just wonderful in this respect and just only took decisions that guaranteed the continued existence of BrassLNG. So rather than you (Dahwa) being an undertaker, we congratulate you for presiding over Brass that is alive,” Obaseki said.
He further stated: “One cannot help but also acknowledge the commitment of the remaining shareholders; NNPC, ENI and Total. It would have been impossible for us to hit the ground running if they didn’t do what they did because they were not ready for it but they just had to do it to keep us going and also for their tolerance while a few of us were doing the negotiations but the good story is that it all ended well.”
“The easiest way to talk about the commitment of the board to carry on with this is that winners don’t quit and quitters don’t win, that is just it, those who were left behind said that we wanted this because the reasons haven’t changed, the market is still there and our offtakers are only asking when we will come on.
The board demonstrated this commitment otherwise when COP left, you would have had to shop for a replacement but NNPC, Total and ENI said they will take up the shares, although they were not ready because shares acquisition is a long process in any organisation and that also encouraged a lot of us in the board,” he added.
On the impact of the Shale phenomenon on the project, Obaseki said that Shale which is majorly driving the United States’ drop of its appetite for foreign fuel was not a threat to the Brass LNG project. He posited that with or without Shale, BrassLNG was still a viable project with a proven market.
“Brass remains a viable and wonderful project. The reasons for conceiving that project are still very relevant today; the market is still there, that is one of the things, shale gas or no shale gas, the market is still there with a large appetite.
“I don’t speculate and I work with data which are fundamental. For you to build a plant, you must have an offtaker. COP has left but as we speak today there is no single buyer that has withdrawn, we have MoUs with all of them, and we have not signed a purchase agreement because we say that we will do that at FID,” he said.
“There are other reasons, Shale gas is different from Shale oil but even before this came out, we had diverted all our products from the US anyway and so that is where the confidence comes from.
“We have hit the ground running and as we go on, once we can see the end, we will inform all of you but the important thing is that you have to acknowledge the fact that the shareholders and board are committed,” Obaseki added.
The one-time GMD of NNPC said in congratulating Dahwa on his appointment that: “What all organisations do, international and national organisations is that they try to preserve their culture and that is really where your appointment becomes the gratifying one for us because you have been here and knows the culture, probably grew with us while we were growing here and so you cannot pretend not to know what our culture is and that is why we thank the minister and Mr. President for your appointment.
“I make bold to say that your group management is strong because I have interacted with them; you just have to make sure that the environment is conducive for every other person to aspire to grow.”
Dahwa in his remarks said that NNPC as the largest shareholder in BrassLNG will continue to work with stakeholders to see that it comes to fruition.
He said: “We at NNPC will continue to collaborate with all stakeholders to make sure that the project that is so important to the government is seen through. We will not stop at that but go ahead to make sure that all the challenges that is pertaining to the development of the project are addressed just like the chairman said and as a major shareholder, we played a very big role in that regard and intend to do more.”
– This Day