With an investment of over $330 million, Petrolex Group has completed sub-Saharan Africa's largest tank farm, scheduled for inauguration tomorrow in Petrolex Mega Oil City in Ibefun, Ogun State. The chairman of the company, Mr. Segun Adebutu told journalists that the facility would decongest Apapa by at least 70 per cent as 2,000 tankers would be removed from Apapa roads. Excerpts:
Before now, you had established a reputation for bankrolling big projects in the entertainment and gaming industries. A while back, you shifted focus to the oil and gas industry. What exactly informed this shift and what is your investment strategy?
Mine has been an interesting journey. When you succeed in one area, you are naturally bold enough to do bigger things. And of course as an economist I know that diversification is part of strategy. So basically, what we are doing is to effectively diversity our investment so as to make bigger impact on the Nigerian economy.
My father was one of the pioneers in the gaming industry, eventually branching out into casinos and then the lottery business. The experience of working with my family gave me the foundational stones for my eventual growth in business.
Over the years, I have been engaged in a number of businesses which cut across oil and gas, solid minerals, construction and maritime. I also run the Oladiran Olusegun Adebutu Foundation (OOA) focused on creating opportunities for children to thrive.
What is equally important is that we have recorded remarkable success in all the sectors we have invested in. That success is what we seek to also replicate with our Petrolex Oil and Gas Limited.
How long did you incubate the idea that led to the establishment of Petrolex Group and what do you want to achieve through the company?
In the bid to revolutionise the Nigerian energy landscape with industry-defining assets across the energy value chain, Petrolex commenced the planning, design and development of The Petrolex Mega Oil City, located in Ibefun, Ogun State about five years ago.
We thought to ourselves, where can we site a tank farm which will not compound the problem Nigerians are already facing in the Lagos and Apapa areas in particular. After years of careful research, we came up with Ibefun, in Ogun State. We were particularly concerned about the woeful plight of the inhabitants of areas where tank farms are concentrated and we believe that this project will ameliorate their suffering. The envisage approximately 60 -70 per cent decongestion of the Apapa and Ibafo tanker traffic, that is, over 2000 tankers and elimination of associated hazards
Also, as you may know already ours is a proposed integrated oil and gas city so this is just one step in a series of steps that will get us to our desired destination. As part of the city, we will have a refinery, a fertilizer plant and lubricants facility as well as a liquefied petroleum gas plant.
But a little more focus on the tank farm, it's a model slightly different from what others have done, we have planned it in such a way that drivers that are coming to our tank farm to pick products can load up quickly and go back to their destinations. Apart from this, those who need to stay back a bit before returning have a comfortable place to nap before the return trip.
How big is this Oil City and what is strategic about it?
What we are commissioning on Tuesday (tomorrow) is our ultra-modern tank farm which comprises Phase 1 of our 10 year expansion programme. To date, we have acquired over 13,000 acres of prime land and currently concluding the negotiation of another 12,000 acres, to make the Petrolex Oil City at 101 square kilometres, Africa's largest petroleum products hub, with a size that is approximately 10 percent the size of Lagos state.
The tank farm enables petroleum products to be stored and distributed effectively and more efficiently, allowing for better services and higher turnovers.
With the capacity to turnover 600 million litres of petroleum products every month, the tank farm is set to improve petroleum products distribution in Nigeria.
This legacy investment, audited by Price Waterhouse Coopers, is over $330 million. It is positioned to transform the future of petroleum products distribution in Nigeria as sub-Saharan Africa's largest products storage tank so far. The mega oil city houses the state of the art Petrolex tank farm which has a 300 million-litre storage facility, residential quarters, army barracks, 30 loading gantries, gas processing plant, vessels, and a 4000-truck capacity park with accommodation for drivers. The trailer park alone is an innovation with an automation and speed that is critical to the delivery of the efficiency that the industry requires. In addition, we have put an expansion plan in place which will increase the storage capacity of the tank farm to 1.2 billion litres in a few years.
Our facility is easily reachable via the waterways, with easy access from the Atlantic Ocean, proximity to the Lagos market, and easy accessibility to the Northern & Eastern parts of Nigeria, all to aid supply and distribution of petroleum products around the country.
We are proactively advancing discussions with several state governments to ensure consistent and adequate supply of petroleum products to other areas of the country.
But this just the beginning of other things planned for the future.
What shift do you expect Petrolex to effect in the local oil and gas industry?
First and foremost, the Mega Oil city is set to create over 10,000 new direct and indirect jobs in the short term. It will also guarantee improved and efficient delivery of products to retail markets.
It will lead to over 15 per cent reduction in retail cost to stations, a massive decongestion of the Apapa and Ibafo tanker traffic and elimination of hazards associated with storage and transportation of petroleum products in these areas of high population density.
Apart from this petroleum products bulk storage; distribution, retailing and refining, are the main links in Petrolex's medium-term drive for growth. We plan to deploy a fleet of at least 150 vessels, barges and tugboats to provide a litany of services across Africa's waters. Petrolex currently has 16 barges, 8 tug boats and a 30KT vessel.
Tell us about the sustainability component of this project
Our unique sustainability model includes a comprehensive environment conservation and reforestation programme and a successful host-community engagement framework whilst its corporate social investments continually add value to millions of lives.
One of the challenges the oil and gas sector has faced in Nigeria is the issue of sustainability. Another is the entire range of problems surrounding local content and participation.
We put these into consideration in setting up Petrolex oil city. We can say that the local community was carried along in the whole gamut of events beginning from inception, to the commissioning of the tank farm which comes up on December 12. As a matter of fact, the commissioning of the project will be monitored in most of the local communities surrounding the location of Petrolex oil city.
Apart from this, we carried along traditional rulers and pressure groups. But beyond these, this project will deliver jobs to thousand of locals and boost their incomes. We are also delivering infrastructure including roads. I must add that all of these things are being done already in one way or the other. In summary, our extensive social investment is planned to impact over two million lives
ls Petrolex going to be listed someday?
We are targeting listing on the Nigerian Stock Exchange in the next 10 years to ensure the business outlives its owners and becomes bigger. By the next five years we would have achieved a significant amount of our ambition, then begin strategy talks with the stock exchanges.
How is the local community responding to Petrolex?
The local community have accepted us with open arms. What you should know is that we are part of the community itself. So it was not a question of strangers coming to set up a facility in Ibefun. We have been part of this community for a very long time, what's different is that we are manifesting in a different form.
We are grateful to all our key stakeholders who have made this a reality. From the federal government, the Vice President who has gracious accepted top commission the tank farm, to the Ogun State Governor, His Excellency, Senator Ibikunle Amosu, the Liken of Ibefun, all the regulatory agencies, our employees, etc. We have enjoyed tremendous support all the way.
Are you afraid of electric cars?
Certainly not! They will eventually complement our development. But for now, we must make the best out of what we have and in doing so we must work to see that existing technology works side by side with what electric cars can offer. It is certain that in the short to medium term, electric cars may not be as popular as many people are painting them to be, especially in the developing world. But that does not however mean that we should not be getting ready for what is a certain future.
What are your final words?
A New World of Possibilities" aptly captures the ever-evolving spirit of Petrolex, as we will not relent until we see Nigeria transformed into an energy self-reliant nation in the immediate future. As integrated energy conglomerate with strategic investments across the energy value chain, we are committed to building communities, transforming lives and driving economic growth and development in Nigeria.