How Dangote Is Double-Crossing Nigeria!

First, may I make it very clear that I am an apostle of capitalism; it is my sincere belief that government should not be in the business of running business. Government, especially those dominated by Nigerian politicians is bad business; there is no better argument to support capitalism than the corruption and inefficiency that have plagued government ran enterprises including but not limited to NITEL, NEPA(PHCN ati be be lo) and NNPC in Nigeria. For these reasons I have supported the privatization regime that begun first with the government owned banks under IBB which has recently seen the Hotels, Real Estate, Ports, Cement, Sugar and Telecom company changed hands.

The benefits of capitalism are best represented by the telecom revolution that was witnessed when private sector operators entered that space via GSM licenses issued by the government. Curiously though, the benefits of private sector efficiency and innovation did not come through privatization of NITEL. Rather, it came through liberalization of the sector by auctioning away the monopolistic rights of NITEL. This is especially true for an under explored market like telecommunication and will likely hold true for Power and Petroleum industries. This brings me to the crux of this piece which is monopoly and its dangers for the petroleum industries.

If you think government industries are dangerous then try monopoly! Monopoly is the wrong way to implement privatization. Monopoly residing with the government, where the actors at least change either by ballot or coup (God forbid), is more tolerable than transferring vast national assets on the cheap to Oligarchs and well connected businessmen who take total control of the national economy not by exercising the competitive and innovative strains of capitalism but by achieving domination through questionable methods. This is exactly what is going on between the government and Dangote Industries one of Nigeria's largest if not the biggest sole proprietorship.  Nothing destroys innovation and efficiency, which are the key benefits of capitalism, than a monopoly. Monopoly is an antithesis of capitalism and should be guarded against.

Note however, that Dangote is not the problem. Business for a few thrives in the absence of regulation simply because businessmen are opportunistic. If you were Aliko Dangote, what will you do? Assuming you were connected to the powers that be, won't you at least try to obtain some favors? Hence, Dangote's behavior while perfectly opportunistic and capitalistic should be curtailed by a society interested in capitalism and its twin which is competition. Note, that I have not used the word "banned", or "stopped", rather I used the word, "curtailed". Our government is failing sorely in curtailing the activities of the Oligarchs by instituting minimum standards and regulations to encourage competition and discourage monopoly and collusion either in the disposal of public assets or after such assets are in the hands of the new generation Nigerian multi-trillionaires –Dangote, Otedola, Jimoh Ibrahim, Mike Adenuga (actually IBB) or Emeka Offor.

To avoid losing my readers, and to provide a concrete analogy as to when Dangote and his cohorts had double crossed Nigeria while the government has looked away, let us examine one of his more recent and controversial transactions. The sale of the oil refinery in Kaduna and PortHarcourt is a perfect case study of the privatization without regulation regime that has especially taken foothold under the Oligarchy backed regime of Olusegun Obasanjo and perhaps continue under his scion Umaru Yar'Adua if the people do not stand up immediately to call this government to order.

According to the Bureau of Public Enterprises, the agency charged with the sale of government owned business, Blue Star - a consortium made up of Dangote, Otedola and River State government -won the "competitive bidding" for these two prized national assets. First off, this is clearly not competitive as it has the hallmark of collusion and price fixing. Foremost, the make up of the consortium is questionable. Here we have Dangote teaming up with his strongest competitor to date (Otedola's Zenon) to make a bid, thus eliminating any stronger competitor from the horizon in the absence of Mike Adenuga who is still on the run.  In addition to this, acting in concert with the Rivers State government effectively neutralizes local agitation and assures government support especially since Odili (then Rivers State Governor) was the certified Prince of the PDP machinery in the South-South and given that Dangote to date is also the largest single contributor to the evil empire. Note that there is nothing illegal about any of these moves in the absence of regulation; in the presence of it however the consortium should have been disallowed from bidding solely on the ground of collusion and unfair advantage.

Furthermore, the BPE use of the term "competitive bidding" is highly questionable. For one, Blue Star Consortium never participated in the bidding process leading to the sale of the Kaduna Refinery. The shady process that led to its emergence is fraught with loopholes that any innovative businessman will exploit for unfair advantage which Dangote and Otedola clearly did. For example the China National Petroleum Corporation (CNPC), which was offered the right of first refusal in the KRPC, had offered $102 million for the firm. This, according to Chigbue (BPE Boss), could not match the reserve price. This in turn paved the way for Dangote to offer $160 million to buy the plant. The process was, however, not thrown open to a competitive process; the unsexy claim by Chigbue of synergy between owners of PHRC and KRPC makes her sound more like someone on the payroll of Blue Star than that of the Nigerian people for whom she should be seeking the most price for their property now on fire sale!

Is it not perfectly possible that Dangote had asked the Chinese to low ball so he can still get KRPC on the cheap? Could a case of price fixing be legitimately made against Blue Star? My answers to the above questions are a resounding yes! If the BPE had bothered to check, Blue Star revealed it had no prior experience managing refineries (on which count regulation should have disqualified this white knight) but instead proposed to hire Sinopec to do so, after China National Petroleum Corporation (CNPC) was out bided, even though both are majority owned by Chinese Government! Haba! This is a clear cut case of collusion, since managing that refinery is a low cost way for CNPC & Sinopec's owner  to have access to prime Nigerian oil fields, involve in managing our refinery, reserving the right to purchase future ownership from Blue Star while fulfilling Chinese foreign policy of cornering more oil reserves and refined product especially in the Gulf of Guinea where she and the West is locked in a bitter battle still bubbling below the surface. Nigeria is being used!

There is no doubt in my mind that Alhaji Dangote is a smart businessman but it is the responsibility of the government to regulate business not to be in their pocket as the BPE clearly is. There is a  right and wrong way to privatize Nigerian government owned businesses, and I have no doubt in my mind that no smart business man will pour $720m in scrap refineries as that loud mouthed Senator Obasanjo-Bello will want us to believe. The recent crying foul by Dangote and Otedola, asking for their money back because the refineries are worse than they thought, is also one smart business move to devalue the future sale of these assets if it (the transaction) is eventually rescinded as Nigerians are clamoring for. Should they not have done their homework? If it is that bad, how come they wanted it that bad? In the next article, I shall examine alternatives to properly privatizing the refineries while realizing the best value for the government treasury while encouraging competition in doing so even if Dangote and Otedola keep up their campaign of bad mouthing and double crossing the Nigerian people. They are smart, but not smarter than 140 million people!



1 2
Re: How Dangote Is Double-Crossing Nigeria!
Nf5kmw1 posted on 07-19-2007, 14:47:54 PM
Michael Oluwagbemi:

Excellent analysis!!!!

I am asking for your help and that of every Nigerian with our Energy campaign. I believe that if we can have a grassroots campaign we can help support the president's efforts. To show his understanding of this issue, I quote the president "As I keep saying, we cannot begin to address, in a fundamental manner, the problems of the economy, until we successfully tackle the power and energy issue. It is critical to all my plans. So I am more interested in how much gas we can tap for domestic use than what we can get for export. We must power this economy."
This campaign is a change in strategy from the old protest "against" fuel price, 12 to be exact in the last 8 years by the NLC and others. This will be a protest "for" Energy. What ever help you can provide from simply running our suggested plans, to putting our ribbon (similar to AIDS campaign) on your clothing, website or newspapers or in your writings until the government reaches the goal of 50,000 Megawatts power grid and a global NNPC with 24 refineries worldwide.

We will be asking for people to wear copper colored ribbon and march for a Global NNPC with 24 refineries and a 50,000 megawatts power grid. As I said before this president understands he challenge ...we need to give him the support to make these changes. If the energy is solved in Nigeria, a lot of Nigerian lives will be greatly improved. Energy is the alpha and Omega in any civilization.

For more information go to
http://nigeriansforsuperenergy.com

Fuel Plan
24 Refineries in a National/Publicly traded oil company with global reach is what we need!!!
They say imitation is a form of flattery. If so, Nigeria needs to look to Venezuela to reform its fuel sector. Due to the policies of Venezuelan oil company PDVSA, the Venezuela are able to enjoy $0.19 per gallon or N6.12. The Venezuelan oil company, PDVSA, had decided that it was not the the crude oil export business but in the global petroleum and chemical business. So they invested in refining and retail business in Venezuela and almost all their export markets. These market include Europe, Caribbean, South America, Caribbean, Canada and United States. "PDVSA is among the leading corporations in the refining business, with a petroleum processing capacity of 3,285,000 barrels a day (1,285,000 barrels a day in Venezuela and 2 million barrels a day outside the country) through 24 refineries: six complexes in Venezuela, one in the Caribbean, eight in the United States and nine in Europe.
I would advice the New President to seek counsel of the architects of PDVSA and also look to what Mr. Putin in Russia is doing to the oil industry."

I would recommend three strategic steps to revolutionize our oil sector.
1. NNPC should be come a government/public firm with part of it shares allocated for Nigerians. This will provide the company with a new direction and ownership need for the global challenges.
2.NNPC should go on a buying spree with the aid of government funds to buy (outright or major) shares in refineries in Africa, China and United States. This will provide us with immediate source of refined products, opportunities to train our people and hard currency. Best of all this does not need the 18 to 24 months to build a refinery. This will also provide us a stop gag measure until we build more refineries. It is all about add value and we need to start doing that.
3.Start building 4 refineries and retail outlets to take care of the local demand as estimated for 2010. This will help put to rest the fuel challenges that we face as a Nation.
We have been bless with natural and human resources and it is time to use them.

Thanks in advance
God Bless Nigeria!!!!

FYI
Looks like Dangote and co have dropped the deal. Look like the heat was too much.
QUOTE:
We asked and it was given.... I say again.... let us make our junk into a treasure and envy of the world!!!!
I have suggested the recommendation... 24 Refineries in a National/Publicly traded oil company with global reach is what we need!!! http://nigeriansforsuperenergy.com/p...2cc90e2833e4d2 Now we need a technocrat in the caliber of Charles Soludo, Dora Akunyili, El Rufai, Ngozi Okonjo-Iweala, Nuhu Ribadu and Oby Ezekwesi to name a few to run NNPC.

Donald Duke has shown that government and private sector can work in Nigeria...if you have the time read of a Nigerian Donald Duke who believes in building world class entities because he had the audacity to dream
In pictures
http://www.skyscrapercity.com/showthread.php?t=463908
In Words
http://www.guardiannewsngr.com/editorial_opinion/article02/180607
http://www.guardiannewsngr.com/editorial_opinion/article03/190607

Back to your article. I 100% agree that businesses will push the line as far as they are allowed and in most cases it is good for the population. However we need a strong government and Judiciary to push back on monopolistic tendencies. The world is full of such examples... from Standard oil of Rockefeller to Microsoft of Bill Gates.
What is happening in Nigeria is similar to what happen in Russia during Yeltsin rule and was fixed by Putin.
QUOTE:
In 1995, as Yeltsin struggled to finance Russia's growing foreign debt and gain support from the Russian business elite for his bid in the spring 1996 presidential elections, the Russian president prepared for a new wave of privatization offering stock shares in some of Russia's most valuable state enterprises in exchange for bank loans. The program was promoted as a way of simultaneously speeding up privatization and ensuring the government a much-needed infusion of cash for its operating needs.

However, the deals were effectively giveaways of valuable state assets to a small group of tycoons in finance, industry, energy, telecommunications, and the media who came to be known as the \"Russian oligarchs\" in the mid-1990s. By summer 1996, substantial ownership shares over major firms were acquired at very low prices by the \"oligarchs.\" Boris Berezovsky, who controlled major stakes in several banks and the national media, emerged as one of Yeltsin's most prominent backers. Along with Berezovsky, Mikhail Khodorkovsky, Roman Abramovich, Vladimir Potanin, Vladimir Bogdanov, Rem Viakhirev, Vagit Alekperov, Viktor Chernomyrdin, Victor Vekselberg, and Mikhail Fridman emerged as Russia's most powerful and prominent oligarchs.
Re: How Dangote Is Double-Crossing Nigeria!
Enforcer posted on 07-19-2007, 15:25:22 PM
QUOTE:
Michael Oluwagbemi:

Excellent analysis!!!!


I would advice the New President to seek counsel of the architects of PDVSA and also look to what Mr. Putin in Russia is doing to the oil industry.\"

I would recommend three strategic steps to revolutionize our oil sector.
1. NNPC should be come a government/public firm with part of it shares allocated for Nigerians. This will provide the company with a new direction and ownership need for the global challenges.
2.NNPC should go on a buying spree with the aid of government funds to buy (outright or major) shares in refineries in Africa, China and United States. This will provide us with immediate source of refined products, opportunities to train our people and hard currency. Best of all this does not need the 18 to 24 months to build a refinery. This will also provide us a stop gag measure until we build more refineries. It is all about add value and we need to start doing that.
3.Start building 4 refineries and retail outlets to take care of the local demand as estimated for 2010. This will help put to rest the fuel challenges that we face as a Nation.
We have been bless with natural and human resources and it is time to use them.

.



Slow down. If NNPC cannot account for the billions of public funds it spends every year or run a filling station in Nigeria, do you think it can do better with a refinery located in a far away America?

The major handicap Nigeria has is corruption. Have you ever seen a copy of published NNPC annual financial report? Have any government and pressure groups in Nigeria ever insisted on one? If not, why?

The problem of Nigeria is not as simple as it looks. There is no point looking beyond the shores of Nigeria to learn anything from any country. The structural and moral defects in Nigeria cannot be found anywhere else in the universe. Nigeria is unique and requires a unique revolution. The time is now.
Re: How Dangote Is Double-Crossing Nigeria!
Tonsoyo posted on 07-19-2007, 16:13:20 PM
Your article is contracdictory and full assumptive conclusions.

I agree with the bottomline that the government owes us the responsibility to regulate the economy, and that a businessman would tryas much as he can to maximize his profit, you cannot make this postulation and still go ahead and conclude that Dangote is double-crossing us. He is only a businessman.

I am not aware of the kind of monopoly that you guys are shouting about in Nigeria. What we have in Nigeria are abundance of cash and carry businessmen, who does not believe in long term investment entailed in manufacturing. The others are those looters who are not willing or are afraid to invest in Nigeria because they know that the Nigerians will be able to reach their assets when the day of reckoning comes.

Where is the monopoly, 18 companies none of them was owned by Dangote or Otedola were granted licenses to build refineries none of them was able to take off, when those who can afford the refineries bought them you started shouting it is ojooro joo (cheating)
About ten companies are licensed for the business of cement production today yet you continue to shout monopoly.
There are more than 50 licenses in private telecommunications today, you continue to shout monopoly, there are 25 strong banks in Nigeria today you continue to shout monopoly, can somebody please show me the monopoly?

Oil, Banking and Telecommunications are the strongholds of Nigeria economy today, yet none of them is a monopoly.

How did you arrive at the conclusion that Otedola and Dangote are the strongest competitors in Nigeria today? What criteria did you use? how did you arrive at your collusion theory? If those who have the capabilities and willigness are prevented from bidding who will buy them?

Your position on China and Sinopec is contradictory, why should the Chinese go thru' Blue star consortium since they already have a right of first refusal? What stops them from buying straight at $160 million themselves, without having to go thru' the round about of future acquisition?
Is ownership and management the same thing? Even if Sinopec is engaged by Bluestar to manage the refineries, they will only get paid based on special arrangement and would not have to involve themselves with the politics and risk of ownership.

If the refineries does not work what they will lose is their service fee and not their capital, that makes sense to me than your own wild imagination and personal conjecture.

If the refineries have been so fantastic, why are we still importing refined products today, upon all the several millions of dollars sunk in them?
Re: How Dangote Is Double-Crossing Nigeria!
Nf5kmw1 posted on 07-19-2007, 16:15:14 PM
QUOTE:
Slow down. If NNPC cannot account for the billions of public funds it spends every year or run a filling station in Nigeria, do you think it can do better with a refinery located in a far away America?

The major handicap Nigeria has is corruption. Have you ever seen a copy of published NNPC annual financial report? Have any government and pressure groups in Nigeria ever insisted on one? If not, why?

The problem of Nigeria is not as simple as it looks. There is no point looking beyond the shores of Nigeria to learn anything from any country. The structural and moral defects in Nigeria cannot be found anywhere else in the universe. Nigeria is unique and requires a unique revolution. The time is now.


My brother:

It is simple, it starts with good leadership ...Fire all the bad eggs in NNPC and bring in a new team. We can get the names from Dangote he knows all of them. Have you heard of any one in NNPC in Jail for corruption After 8 years, 240% increase in price (N11 to N65), 17 licenses granted, zero refineries working and total dependent import. We must say that the Energy policy has been a failure. In most places the people responsible for this failures and continuing to push this failed approach would have been fired at year 2.

The "Nigeria Curse" is no different then other countries like Russia. Putin cleaned house and took back all government assets and set up partnership with the private sector.
QUOTE:
Nigeria is unique and requires a unique revolution. The time is now
My brother the revolution has started and in a very poor state.
Please Please Please I take God beg you time to look and read the Donald Duke Legacy
In pictures
http://www.skyscrapercity.com/showthread.php?t=463908
In Words
http://www.guardiannewsngr.com/editorial_opinion/article02/180607
http://www.guardiannewsngr.com/editorial_opinion/article03/190607
and see that Nigerians can make it happen at world class levels in Nigeria. They say "there is nothing to fear but fear it self"
QUOTE:
There was an unusual self-assurance about Duke as Governor, borne, I suspect, out of very powerful instincts, deep religiosity and spiritualism, which are not easily discernible. Instincts, without doubt, have played an important role in his career. While his instincts explain, in part, why he was never daunted by the fear of failure, his self-assurance explains why he went about his business as Governor, almost self-effacingly, without fanfare, without sirens, without a truck-load of armed personnel or a long convoy of escort vehicles.

His leadership made Formula One racing to offer the state first slot to host a race when they are ready!!!!

We can do it brother!!!!!
Re: How Dangote Is Double-Crossing Nigeria!
Busanga posted on 07-19-2007, 16:50:05 PM
QUOTE:
Your article is contracdictory and full assumptive conclusions.

I agree with the bottomline that the government owes us the responsibility to regulate the economy, and that a businessman would tryas much as he can to maximize his profit, you cannot make this postulation and still go ahead and conclude that Dangote is double-crossing us. He is only a businessman.


There is nothing contradictory about saying Dangote as a business man is double crossing Nigeria (the people) with the connivance of her government. The government and the people of Nigeria as far as interests goes in this matter are separate entities and you know it.

QUOTE:
I am not aware of the kind of monopoly that you guys are shouting about in Nigeria. What we have in Nigeria are abundance of cash and carry businessmen, who does not believe in long term investment entailed in manufacturing. The others are those looters who are not willing or are afraid to invest in Nigeria because they know that the Nigerians will be able to reach their assets when the day of reckoning comes.

I am interested in a monopoly situation developing in the energy sector. I will make hay while the sun shines. I don't wait for HIV to develop to full blown AIDS before treatment hence this article. A monopoly situation can develop with Dangote and Zenon being the two biggest oil importers as we speak and then jointly owning the refineries. The time of prevention is now not later. It is called being far sighted.

QUOTE:
Where is the monopoly, 18 companies none of them was owned by Dangote or Otedola were granted licenses to build refineries none of them was able to take off, when those who can afford the refineries bought them you started shouting it is ojooro joo (cheating)
About ten companies are licensed for the business of cement production today yet you continue to shout monopoly.
There are more than 50 licenses in private telecommunications today, you continue to shout monopoly, there are 25 strong banks in Nigeria today you continue to shout monopoly, can somebody please show me the monopoly?

If only you will limit the discussion to the frame of reference of this articles. I have not examined other Dangote's businesses. I think he is a fine businessman but in any case, if you look at the bigger picture a monopoly of Oligarchs similar to Russias is fast developing. I have nothing against them provided they are well regulated and transparent.

QUOTE:
Oil, Banking and Telecommunications are the strongholds of Nigeria economy today, yet none of them is a monopoly.

How did you arrive at the conclusion that Otedola and Dangote are the strongest competitors in Nigeria today? What criteria did you use? how did you arrive at your collusion theory? If those who have the capabilities and willigness are prevented from bidding who will buy them?

How I arrived at them is clear- when you have Exxon and Chevron buying up all the refineries in USA together with the state of Texas as a partner, tell me if FTC will even give such transaction a minute of the day for consideration!

Y
QUOTE:
our position on China and Sinopec is contradictory, why should the Chinese go thru' Blue star consortium since they already have a right of first refusal? What stops them from buying straight at $160 million themselves, without having to go thru' the round about of future acquisition?
Is ownership and management the same thing? Even if Sinopec is engaged by Bluestar to manage the refineries, they will only get paid based on special arrangement and would not have to involve themselves with the politics and risk of ownership. If the refineries does not work what they will lose is their service fee and not their capital, that makes sense to me than your own wild imagination and personal conjecture.

You answered your own question. Chinese will prefer local collusion and low risk access by management than go in full force to volatile Nigeria. Theirs is a smart business and foreign relations move. The fact that Dangote and co now risk losing their money shows how smart the Chinese was knowing the heat from such- in fact, take lessons. The Chinese prefer low visibility especially seeing how the UNOCAL deal backfired. While you try to minimize the conflict of interest here- it is clear for all to see. As you clearly said, it is not as if the Chinese don't have $160m, then why did they bid a wide $60m lower? Does Dangote know something they don't? Were they in cahoot given that they still won through covulated means via management contract? Your guess is as good as mine.

QUOTE:


If the refineries have been so fantastic, why are we still importing refined products today, upon all the several millions of dollars sunk in them?

If the refineries don't work or have no hope for working, how come they fetch $720 m? And that is just two of them. To build a 250,000 bpd refinery ground up for your info cost nothing less than $1bn today; if Dangote has $0.75bn to buy one, let him go ahead to build it ground up and put NNPC out of business instead of stealing it cheap from under us.

Questionable privatization is not the only way to get rid of under performing national assets- there is an alternative and a right way to do it. Stay tuned.

Thanks for your time. All I say, I say for the love of country. Nigeria we Hail Thee
Re: How Dangote Is Double-Crossing Nigeria!
Oluye posted on 07-19-2007, 17:25:25 PM
'The letter, which was addressed to the BPE DG, reads in part, "We have, therefore, pulled out to enable the NNPC to operate it at full capacity, without government funding, then eliminate NNPC's importation of petroleum products, and gradually eliminate queues at the filling stations within 12 months."

The pull out was, however, with a caveat, "In the event that the NNPC failed to meet these commitments within 12 months, we reserve the right to resume interest in the refineries at a re-negotiated rate to reflect the state of the assets."' -The Punch

____________________________________________________________________________

Who says those guys are pulling out? They merely want to teach Nigerians a lesson by subjecting us to torture for another 12 months. By then we will be begging them to buy the refineries and they may be worth much less. Alternatively, NNPC will use government funds to fix the most expensive components and then the sale will be remade. It is business, if you think they are being unfair, go and buy the refineries. This is just been done so that the NNPC guys who want to make more money before they hand over will have time to steal more. They are the real ones behind this agitations. The generality of Nigerians will be the losers. Even if the refineries are later sold to them at a lower rate, the collective loss of the nation in 12 months will far out-way the gains.
I think what we should be concerned about right now is that there should be regular power supplies- by whatever terms. The economics of capitalism will iron itself out once this is achieved.
Re: How Dangote Is Double-Crossing Nigeria!
Tonsoyo posted on 07-19-2007, 18:10:19 PM
Busanga,

QUOTE:
QUOTE:
There is nothing contradictory about saying Dangote as a business man is double crossing Nigeria (the people) with the connivance of her government. The government and the people of Nigeria as far as interests goes in this matter are separate entities and you know it.


The blame will still fall at the doorstep of the government. Once again all business seek to do that



[QUOTE]I am interested in a monopoly situation developing in the energy sector. I will make hay while the sun shines. I don't wait for HIV to develop to full blown AIDS before treatment hence this article. A monopoly situation can develop with Dangote and Zenon being the two biggest oil importers as we speak and then jointly owning the refineries. The time of prevention is now not later. It is called being far sighted.


This means that you have failed to take into consideration the fact that licenses for new refineries are being issued as we speak. Let those who are interested get a license and build.
I am not aware that Dangote oil and gas is a major importer of oil in Nigeria, the company was not even know as a major player in oil and gas until the their recent bid for oil blocs



QUOTE:
If only you will limit the discussion to the frame of reference of this articles. I have not examined other Dangote's businesses. I think he is a fine businessman but in any case, if you look at the bigger picture a monopoly of Oligarchs similar to Russias is fast developing. I have nothing against them provided they are well regulated and transparent.


OK we will leave that for another day.


QUOTE:
How I arrived at them is clear- when you have Exxon and Chevron buying up all the refineries in USA together with the state of Texas as a partner, tell me if FTC will even give such transaction a minute of the day for consideration!
Y

Zenon and Dangote oils are non starters when it come to oil in Nigeria. Zenon is only a giant in importation of diesel. Those American companies that are major players in our oil industry said that they will not even take over those refineries for free. The first question should be whether we should sell those refineries at all if yes, then who is wiling to by them?

QUOTE:
You answered your own question. Chinese will prefer local collusion and low risk access by management than go in full force to volatile Nigeria. Theirs is a smart business and foreign relations move. The fact that Dangote and co now risk losing their money shows how smart the Chinese was knowing the heat from such- in fact, take lessons. The Chinese prefer low visibility especially seeing how the UNOCAL deal backfired. While you try to minimize the conflict of interest here- it is clear for all to see. As you clearly said, it is not as if the Chinese don't have $160m, then why did they bid a wide $60m lower? Does Dangote know something they don't? Were they in cahoot given that they still won through covulated means via management contract? Your guess is as good as mine.


Did you listen to yourself above? I doubt. Exactly the Chinese did not buy because they did not see them as viable,they only think it is worth $102 million you just said it yourself, I personally believe that they were compelled to buy them buy Obasanjo looking for somebody to dump them on, having recognized them as one of the greatest conduits for siphoning money. No wonder they are trying to dump them.


QUOTE:
If the refineries don't work or have no hope for working, how come they fetch $720 m? And that is just two of them. To build a 250,000 bpd refinery ground up for your info cost nothing less than $1bn today; if Dangote has $0.75bn to buy one, let him go ahead to build it ground up and put NNPC out of business instead of stealing it cheap from under us.


With due respect Busanga, this does not make sense to me, it is the prerogative of who has the money to choose what he will invest it on. By your own mathematics, if it will cost $1B to build a new 250,000 bpd refinery(I know it cost a lot more) how[B] cheap
is it to buy a 51% of 210,000 bpd moribund refinery for $561 million? Your mathematics is strange.



QUOTE:
Questionable privatization is not the only way to get rid of under performing national assets- there is an alternative and a right way to do it. Stay tuned. [/B]


We have tried in many ways and failed, this is just another trial. The problem is that Nigeria thrives too much on rumour they never bother to find out


QUOTE:
Thanks for your time. All I say, I say for the love of country. Nigeria we Hail Thee
[/QUOTE]


We are all doing this for the love of our country, but the greatest bain of a society is ignorance of its people. I'll stay tuned like you advised. I'll always conceed to superior argument at any time.
Re: How Dangote Is Double-Crossing Nigeria!
Tonsoyo posted on 07-19-2007, 18:12:41 PM
QUOTE:
'The letter, which was addressed to the BPE DG, reads in part, \"We have, therefore, pulled out to enable the NNPC to operate it at full capacity, without government funding, then eliminate NNPC's importation of petroleum products, and gradually eliminate queues at the filling stations within 12 months.\"

The pull out was, however, with a caveat, \"In the event that the NNPC failed to meet these commitments within 12 months, we reserve the right to resume interest in the refineries at a re-negotiated rate to reflect the state of the assets.\"' -The Punch

____________________________________________________________________________

Who says those guys are pulling out? They merely want to teach Nigerians a lesson by subjecting us to torture for another 12 months. By then we will be begging them to buy the refineries and they may be worth much less. Alternatively, NNPC will use government funds to fix the most expensive components and then the sale will be remade. It is business, if you think they are being unfair, go and buy the refineries. This is just been done so that the NNPC guys who want to make more money before they hand over will have time to steal more. They are the real ones behind this agitations. The generality of Nigerians will be the losers. Even if the refineries are later sold to them at a lower rate, the collective loss of the nation in 12 months will far out-way the gains.
I think what we should be concerned about right now is that there should be regular power supplies- by whatever terms. The economics of capitalism will iron itself out once this is achieved.



This kind of reason can only come from a deeply corrupt mind. Nigeria is bad, but I don't think it is that bad. This does not make sense at all.
Re: How Dangote Is Double-Crossing Nigeria!
Ozoodoo posted on 07-19-2007, 20:42:23 PM
QUOTE:
This kind of reason can only come from a deeply corrupt mind. Nigeria is bad, but I don't think it is that bad. This does not make sense at all.


Tonsoyo, aka toronto (fake) lawyer,

I really do believe you need to take a brief rest from this village because you are fast losing your mind.
Re: How Dangote Is Double-Crossing Nigeria!
Oluye posted on 07-19-2007, 23:05:02 PM
Ozoodoo,
Big thank you!

I don't think I need to reply Tonsoyo, I was surprised by his comment. Nevertheless, if blue star pulls out fully and NNPC takes over, we shall all see in 12 months.
-We shall see if Nigeria would not have spent more money on the refineries;
-If Nigeria would not have lost more to the government workers who are lining their personal pockets and collecting salaries.
-If the state of the refineries would not have degenerated further or
-If what ever is subsequently expended on it by the government subtracted from the sales cost in 12 months time when we all agree that NNPC cannot cope will not be less than the present sales price.
This guys are not pulling out, they are calling our bluff. We either sell to them, find better buyers or continue to deal with NNPC inefficiency, resulting in colossal losses to the economy.
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