First Bank

Monday, November 16, 2015

Embattled Oil Barons Jide Omokore, Kola Aluko’s Plot Return To Winning Ways With Atlantic Energy’s Submission Of Plans To Offset Outstanding Debts To ''Authorities''

Embattled Oil men Jide Omokore and Kola Aluko have officially taken a major step towards a return to winning ways.

Their money maker Atlantic Drilling Energy Concepts has
submitted repayment plan on all outstanding debts to authorities.

This is against the background of been allowed to carry on operations without interference.

The full details of this bounce back move is reproduced as sourced

The stage is set for the country's foremost indigenous drilling company, Altantic Drilling Energy Concepts Nigeria Limited, to get back on course, thanks to the recent submission of its plan to settle outstanding commitments to its financial and production partners to the authorities.

Atlantic has been the victim of the shark-infested industry where cut-throat competition for billions of oil dollars turn friends to foe and everyone lives by the rule that the end justifies the means.
Its Nigerian promoters had responded to the nation's clamour for more indigenous participation in the oil industry dominated since 1937 when the first crude oil deposit was found by foreign multinationals.

Such was the excitement of the oil regulators that a few Nigerians could muster the courage to take on the foreigners that it did everything possible to make its entry into the big league successful.
Incorporated as Atlantic Drilling Energy Concept Limited on July 19, 2010, it asserted its Nigerian character when, in October 2011, it became Atlantic Drilling Energy Concepts Nigeria Limited giving it stronger muscle to execute the Strategic Alliance Agreement it signed with the Nigeria Petroleum Development Company, NPDC six months earlier.

Under the agreement, Atlantic took charge of four oil blocks- OML 26 FHN, OML 30 Shoreline, OML 34 Niger-Delta Oil and OML 42 Neconde. It was to provide funds,technical services, drill and sell crude oil.

To demonstrate seriousness, it launched a massive search for the best brains in the industry poaching the key personnel of its indigenous and foreign competitors.

Its industry rivals watched, in amazement, how the young company rode through the business like a tornado connecting the big influencers with ease and converting leads to business.

They believed there was one hurdle Atlantic would find difficult to scale: finance.

But Atlantic's goal-getting team had it all fixed. First, it secured $490 million from the First Bank and while the industry was abuzz with the feat, landed another facility of $120 million with SkyeBank.

This enhanced capacity further strengthened the petroleum authorities' confidence in the company. The evidence: a fresh Strategic Alliance Agreement that gave Atlantic four additional oil blocs- OML 60, OML 61, OML 62 and OML 63.

Predictably, the fresh deals made its rivals green with envy. Their first offensive was in line with the saying: if you can't beat them, join them. A key industry rival proposed a deal to take two of Atlantic's eight operating licenses offering mouthwatering bucks. The transaction could not work because Atlantic, relying on market intelligence, saw through the plan to weaken its position in the sector.

Frustrated that it could not neutralize Atlantic's competitive advantage, industry rivals waited for the opportunity to revenge.

That chance came with the change of government and the ascension of the All Progressives Congress administration following the 2015 presidential elections. Exploiting the new administration's passion against corruption, industry rivals, baying for blood,  sought to set the new government against Atlantic by misrepresenting its transactions as unethical and fraudulent.

For instance, considering the multi-billion dollar financing of crude oil production business, no company ever has all the money to pay down commitments as at when due. The tradition is to raise counterpart funding through loans from commercial banks, then pay as crude oil produced is sold.

The commercial banks have, over time, developed stringent conditions to block bad loans. The fact that the Central Bank of Nigeria supervises their operations and penalizes violations have taught banks to ensure due diligence in granting loans. The establishment of Assets Management Company of Nigeria, AMCON to take over failed institutions is a sword of Damocles hanging over any bank that got broke. So they have learnt to make sure that the customers have the capacity to repay commitments.

For Atlantic to succeed in raising such huge amount as $490 million from century-old First Bank and another $ 120million from the financial behemoth called Skye Bank, finance and petroleum sector operators know the company must have passed the stiff integrity test.

Recently, Oando Energy Resources announced that it had repaid $100 million loan it took from African Export-import Bank, AFREXIM to finance the acquisition of the ConocoPhillips Nigerian Oil and gas business in July 2014. Declaring that its net debt position now stands at $500 million, Chief Executive Officer Pade Durotoye said: " The upsizing of the RBL loan is a true testament to the quality of the assets we acquired in  July 2014. The cash flows from these assets have continued to pay down the company's post-acquisition debt with the assistance of the value realised from the resetting of our hedge instruments".

Durotoye spoke as the capital market spun into furore over Oando results for year 2014 as analysts raised hues over its provision for debts.

But in the case of Atlantic Energy,  all this logic flew out of the window once industry rivals hit the streets with malicious calumny polluting the press in tune with the African proverb, if the rat can't get to eat the corn, it would rather waste it.

Led to believe it was fighting the cause of corruption and state swindle, sections of the press went to town with the tale that Atlantic's success was the result of shady deals. None bothered to read between the lines why banks being owed preferred to reconcile the debts than resort to litigation. Few looked beyond their noses to ask why certain industry rivals were keen to misinform on the transactions of their fellow corporate player rather than confess to the integrity of their own operations. Few asked why players turned into oil sector regulators and auditors reporting on the transactions of Atlantic Energy.

The revered statesman of Nigeria's independence era, Obafemi Awolowo, once said that lies may travel a long distance, but truth catches up with it in seconds. So is the emergent story of Atlantic. Once vilified and libeled, the porous fabrications of fraud and sleaze are disappearing as the country's helmsmen discover that the transactions were not abnormal and that the media trial was a rape by industry gangs.

Following several interactions, the authorities recently gave the company the nod to present the repayment plan for commitments to the NPDC and the financial institutions. At last, relief has come to workers and production partners as both can see through the dark tunnel of corporate wars.
But students of corporate competition and industry players should learn a lesson from the travails of Atlantic Energy: turbulence is the name of the game at the top.

1 comment:

  1. What a load of crap! If it's possible for such image laundering tripe to be published on a site like this, then Nigeria is indeed finished! He'll hole of corruption.