June 22, 2005/Source The Punch

Zenon Petroleum and Gas Limited and Transnational Corporation of Nigeria Plc, on Tuesday in Lagos, signed a Memorandum of Understanding on the proposed Lagos private refinery.

The agreement is expected to lay the foundation for a joint venture effort to build a 400,000 barrels per day petroleum refinery in Epe. The planned refinery, estimated to cost about $600million, has been scheduled to be constructed in two phases begining January, 2006.

Transnational Corporation of Nigeria Limited, a multi-sectoral private sector conglomerate initiated by President Olusegun Obasanjo last year, has leading industrial, financial and business personalities on its board.

Key driving personalities behind Transcorp include: Chairman, Zenon Petroleum, Mr. Femi Otedola; President, Dangote Group, Alhaji Aliko Dangote, Managing Director, Zenith Bank Plc, Mr. Jim Ovia, and the Director-General of Nigerian Stock Exchange, Dr. Ndi Okereke-Onyiuke, among others.

Transcorp was established to present a national competitive force to multinational corporations in Nigeria germaine to the development of the nation.

In his address at the agreement signing ceremony held on the floor of the NSE in Lagos, Otedola said that his company would put down $100million equity funds towards the establishment of the private refinery.

According to him, the joint venture will operate through a Project Implementation Committee and a Technical Management Board, both of which will be composed of industry experts

He said that the refinery venture, which is just one of the projects planned for executive by Transcorp, “typifies the government’s efforts to deregulate the downstream sector of the Nigerian petroleum Industry.” According to him, the drive behind it “is to encourage the creation of competitive indigenous companies to supply petroleum products capable of competing in the international markets.”

Besides, he stated that the project would result in the enhancement of local supplies of petroleum products.

Apart from the $100million investment by Zenon, Transcorp would be at the capital market early next year to raise between $100million and $150million, after it must have been listed on the Nigerian Stock Exchange.

In her address, the Director-General of the NSE, recalled the incidents that led to the establishment of Transcorp.

According to Okereke-Onyinke, President Obasanjo gave a platform for the take-off of the company in his plan to give equal opportunities to Nigerian business operators to explore the outside economies.

Describing the establishment of the refinery, she said that the project would have multi-dimensional benefits, including enabling the country to “tackle the problems of products’ shortages, erratic supply and high costs.”

“The creation of a modern refinery under this venture will create new local jobs and increase economic activities through support services from local companies,” she added.