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Aiteo: The Little Known But Impactful Nigerian Oil Company

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“Aiteo what?” That was the reaction from many Nigerians when Aiteo Group signed a N2.5 billion deal with the Nigeria Football Federation (NFF) in April 2017, making the company Optimum Sponsor of the Super Eagles. To those in the oil and gas industry, however, that was a true-to-type gesture from a firm that had consistently flourished where others failed.

Founded in 1999 by Benedict Peters as Sigmund Communecci Limited, Aiteo Group wears the garland of being the most successful indigenous oil and energy company in Nigeria by crude production output. Its areas of strategic focus are exploration and production, bulk petroleum storage, petroleum products refinement, trading, marketing and supply and power generation and distribution.

Aiteo, presently, has one of the largest private storage facilities for refined petroleum products in sub-Saharan Africa. Assets include petroleum storage facilities with capacity of more than 320 million litres; a terminal in Port Harcourt, Rivers State with capacity of over 110 million litres and an Apapa terminal in Lagos with capacity of approximately 210 million litres. But before all that, here is a bit of history.

After graduation from the University of Benin and completing his mandatory national youth service with Union Bank, Mr. Peters began a seven-year sojourn that took him first to Ocean and Oil (now known as Oando) and later to MRS Oil. He found kindred spirits in fellow young and upwardly Wale Tinubu, Jite Okoloko and Mofe Boyo who invited him over to Ocean and Oil. That became a good platform to expand his knowledge and take advantage of early opportunities to integrate into the Nigerian oil and gas sector.

Like a goldfish, Peters attracted the attention of rival firms. In 1994, five years after graduating with a degree in urban and regional planning, Peters switched to MRS as an Group Executive Director. His portfolio included driving the company’s trading business. Efficiency and reward have no hiding place and so it was that an impressed Alhaji Sayyu Dantata and other members of the MRS board elevated Peters to the position of Managing Director.

He left MRS in 1999 to establish Sigmund Communnecci.

Resourcefulness, goodwill, devotion and faith were factors that galvanized the company from the very start. A loan of N50 million came from City Express Bank to “finance the importation of petroleum products such as bitumen, LPG, AGO, LPFO, Base oil, kerosene & other products acceptable by CEBL on merit and on case by case basis.” After the first loan was paid back on schedule, the bank on October 12, 2000, approved a N250m standby line of credit for Sigmund Communnecci.

That was Sigmund Communnecci’s first loan and the beginning of an ongoing mutually beneficial dalliance with Nigerian banks. A clearer and bigger vision saw Sigmund Communecci rebrand from a petroleum product supply and trading company to become Aiteo, a 36–degree energy conglomerate, in 2008.

A change of identity did not stop the credit facilities.

There was a $30m Inventory Finance Facility from Ecobank on March 06, 2009 “to part finance the local purchase/importation of Petroleum products under a warehousing arrangement for open market sales.” Union Bank offered a $25m ITF/BA facility then increased it to $50m on November 8, 2009 while renewing an existing N2bn term loan facility to “finance the importation/local purchase of petroleum products from reputable refinery/supplier for onward sale to local off takers” while the term loan was for “payment of classified debt in the books (via Broad bank and construction of Petroleum Storage facility.”

To finance the tank farms at Apapa and Abonema which gave the company considerable leverage in the sector, Aiteo obtained a N1,113,326,000 loan from First Bank on June 11, 2010. The push for domestication of the oil and gas industry led to the Nigerian Local Content Act, which received presidential assent on April 2, 2010. It provided a framework towards indigenization of content in the oil and gas industry and stood as a ray of hope for many Nigerian companies whose growth had been stunted by fierce competition from better equipped, more experienced and more liquid multinationals.

In 2013, Petroleum Development Company (SPDC) announced the decision to let go of some onshore assets it considered “disposable” in the Niger Delta. The company had faced serious problems on the Delta with oil theft, environmental damage, political protests and vandalism of its facilities. An opportunity to sell a troubled asset was welcome.

Based on this, Shell was interested in disposing of, not just OML29, but other assets including, OMLs 18, 24, 25 and the Nembe Creek Trunk Line pipeline. As a major player in the oil and gas industry, Aiteo had been involved in Nigerian National Petroleum Corporation (NNPC) term contracts and oil swaps business, and had developed a clout as a fast-growing Nigerian company in the oil and gas space. It became involved in the acquisition process because SPDC was in dire need of suitors for the four assets it was offering for sale.

Therefore, in partnership with three other companies, it took a bold and brave shot at the acquisition of OML29. Prior to the divestment from OML29, SPDC was the operator of the joint venture between the Nigerian National Petroleum Corporation (55%), SPDC (30%), Total E&P Nigeria Limited (10%) and Nigerian Agip Oil Company Limited (5%) which had OML29.

These three international oil companies were involved in the process that saw OML29 change hands from Shell to Aiteo on March 15, 2015.

Aiteo made the highest bid of $2.85 billion and won OML 29, the biggest of the four oil fields that were divested by Shell. The company defeated other indigenous oil giants. Apart from OML 29, Aiteo also submitted a bid for OML 24 alongside Sahara consortium, PanOcean/Newcross, Shoreline, but lost out to New Cross.

The bid for OML 29 was an open and transparent bid conducted by Shell and its international partners. It took over a year to get ministerial consent and nobody was offered a bribe in respect of the bid which the Aiteo consortium won. The wait and the rigorous process involving three international multinationals give a lie to claim that former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke.

When Aiteo acquired OML 29, average production by Shell was 23,000bpd. However, between August 2015 when Shell fully exited the facility and December 2016, Aiteo recorded an outstanding production growth. Average production was 80,000bpd, at peak 90,000bpd, amounting to +400% increment in one year.

This feat has not only generated over 11,000 job opportunities but also reinforced Aiteo’s position as a leading indigenous oil and gas company with prospects to become a major global player in the medium to long-term. The company’s strategic strides have contributed Foreign Direct Investment (FDI) worth over US$4 billion to the Nigerian economy.

Today, Aiteo is the largest indigenous petroleum company according to output in line with the Nigerian government target of 100 per cent local content in 2027. It is, therefore, impossible for any Nigerian, even with a winking acquaintance with the Nigerian oil and gas sector, not to have been touched one way or another by Aiteo.



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