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Business News of Tuesday, 25 November 2003

Source: Graphic

Sahara Resources To Increase Business Portfolio

Sahara Energy Resources Ltd has indicated its preparedness to increase its business portfolio in the country.

According to the company, it is preparing itself to take advantage of opportunities that would be created under the West African Gas Pipeline Project as well as spread its tentacles to cover marketing fuel.

The company will also invest in the real estate industry, which it has already started in its home country, Nigeria, where it builds modern houses and mansions for long-term leases. It has already started some fruitful discussions with landowners in the country in that direction.

“As a typical Sahara style, we do not believe any opportunity is small. We take advantage of every opportunity and work our way up to achieve the maximum,” the Chief Executive of the company, Mr Tonye Cole, stated in an interview.

The chief executive stated that the company had already acquired two fuel service stations at Adabraka and Tema and has targeted at least 75 fuel service stations throughout the country that the company hopes to acquire and develop to bring competition into the industry. Sahara is undoubtedly young in the petroleum industry but a giant in its own right, considering the volume of business it is engaged in.

The company was registered in 1996 as a crude oil marketing company, being the first indigenous company in Nigeria. Now there are about seven. Prior to that, it ran a boutique called “Men’s Room” in Victoria Island. The shop still operates as a subsidiary of Sahara and sells all types of men’s wear. With an initial workforce of five employees, the company now employs over 400 young people.

The company, at the outset, engaged itself in buying crude oil and outsourcing the stuff to bigger multinationals such as Shell, ExxonMobil, ChevronTexaco and Vitol as a way of warming its way into the business. The company lifted its first crude in 1997, leasing a vessel at a cost of $650,000 which it was compelled to pay upfront because of past records of people leasing vessels and never returning or paying for them.

Presently, the company lifts crude oil for Ghana, Senegal, Cote d’Ivoire, Brazil and other countries. It operates six vessels with capacities of between 20,000 and 30,000 metric tonnes per trip. It also operates fuel marketing services in Nigeria where it operates about 140 tanker trucks and distributes approximately 300,000 litres per day.

While lifting crude to other countries, the company imports finished petroleum products such as diesel, kerosine and petrol for both domestic distribution and export. To that end, the company has two depots in Ibafun, near Lagos for domestic distribution, and Port Harcourt for the storage of products for export. Each depot has two storage tanks of 15,000 metric tonnes. One tank stores Automobile Gas Oil (AGO) while the other stores Household Kero (HHK).

The recent deregulation of Nigeria’s petroleum industry saw the company obtaining a licence to do oil exploration. Under a programme called the Marginal Fields Project, the Nigerian government opened its oil exploration sector to indigenous companies Sahara won one of the 24 oil blocks out of over 300 applications. This again made it the first indigenous off-stream company.

About a month ago, the company submitted bids for exploration fields in Sao Tome and Principe and hopes to grab at least three fields by the end of December this year. Sahara also has a real estate subsidiary, which is currently developing a four-acre virgin land valued at $8 million in Abuja.

The real estate arm also has another 70-acre undeveloped land at the outskirts of Abuja, valued at about $10 million. The company intends to convert the parcel of land into state-of-the art estate apartments for long lease. The company also operates Marcell’s Meadows, a long lease lodge facility in Victoria Island, Nigeria.