Related -Sao Tome and Addax mentioned
A flag-carrier for African ambition
By Upstream staff
In 12 years, Oando chief executive Wale Tinubu has built his start-up company into one of the largest listings on the Lagos Stock Exchange
Wale Tinubu is one of a new breed of Nigerian entrepreneurs impatient to see the country's troubled downstream sector liberalised and ready to enter the upstream game with gusto.
With operations strung along West Africa, his Lagos-registered Oando was listed last year on South Africa's Johannesburg Exchange.
The company was founded just 12 years ago with $500 and a licence to trade products in the Cawthorne Channel.
Oando is now one of the largest retail listings on the Lagos exchange, boasting an annual turnover of about $2.5 billion and a $50 million pre-tax profit.
“The downstream industry has boundaries but the upstream has none,”he says.
“We are targeting exponential growth in the wider region. We saw early on that the integration of upstream and downstream sectors was the future and the government is encouraging smaller players to enter a liberalised gas sector, building gas pipelines to open up industry in the interior.”
Tinubu believes the next wave of expansion in the Nigerian economy will come from indigenous upstream companies in the Niger Delta.
“There are vast opportunities in what is presently a foreign-dominated arena,”he says.
The company won two exploration blocks and a marginal field development licence in the Niger Delta in 2005.
Oando aims to use the upcoming round to bid for low-risk properties in the swamps and near-shore shelf, as opposed to deep-water properties.
“We're looking across West Africa, especially Equatorial Guinea and Sao Tome, but we're being careful not to over-stretch ourselves while we expand in-house capacity.”
The 39-year-old plans to double Oando's turnover once midstream assets are consolidated and the upstream business kicks in.
The company aims to produce 100,000 barrels per day before 2012 with a 1 million barrel reserves base.
Like his corporate role model Addax Petroleum, he plans to build on synergies developed in the downstream oil services market, while firmly planting Oando on the upstream map through a combination of drilling and acquisitions.
“We've never had an oil block before, so we're seeking strategic alliances for exploration and production and first class Nigerian professionals from all over the world to join us,”he says.
After finishing a masters degree in law at the London School of Economics , he worked for four years at the family law firm K. O. Tinubu&Co before breaking away at 25 to set up his holding company Ocean&Oil. Initially peddling products to oil-sector contractors from a 1000-tonne barge from Bonny Island to the Onne Free Port, he eventually built up a fleet of seven vessels turning over $500 million before entering the oil services market.
Now he is pushing to accelerate gas-sector liberalisation and the Gas Master Plan, on which Oando has collaborated with the federal government.
“Oando aims to help lay a nationwide gas grid within eight years and consolidate its regional presence,”he says.
“Where the West African gas pipeline reached landfall in Benin, Togo and Ghana, Oando aims to connect these hubs to the continent's interior. We're in an advanced stage of negotiations in all these countries.”
Oando has successfully migrated from coastal logistics to becoming a serious upstream player, eyeing swamp assets in the Niger Delta as a natural launchpad for aspiring exploration and production independents as foreign entities depart, despite the security risks.
“We have told the government there can be no military solution to the delta crisis,”he says.
“These youths must instead be integrated into the oil and gas sector, guarding installations.”Tinubu is irritated by what he sees as the slow implementation of reform and continues to agitate for the removal of fuel subsidies, which he says impairs industrial performance and constrains social spending.
“My motivations remain unchanged. I dream of creating Africa's first integrated oil and gas company, built to international standards.
“The Nigerian business climate is changing rapidly with the fiscal reform of public finances, reduced deficit spending and reserves nudging $45 billion, so it's up to the private sector to spearhead growth if we can kill of public sector corruption.”His tenacity has inspired others. Earlier this year he was acknowledged by the Swiss-based World Economic Forum as one of the Young Global Leaders for 2007.
“I am determined. I never give up and actually I see myself as a bit of an adventurer,”Tinubu says.
A jazz fan and avid reader of autobiographies by successful corporate leaders, Tinubu likes to ponder on the evolution of global events, devouring works detailing major battles that shaped the world.
He lives with his wife and five children on the Lagos lagoon in Ikoyi and enjoys swimming and watersports .
--------------------------------------------------------------------------------
23 February 2007 00:01 GMT | last updated: 23 February 2007 08:03 GMT
