DANGOTE RUNS FOR COVER

THE PUNCH has this story about Dangote's withdrawal from the refineries imbroglio.

Blue Star Oil Services Limited, the consortium that acquired controlling stakes in the Port Harcourt and Kaduna refineries, has pulled out of the deal.
The consortium is made up of companies belonging to billionaire businessmen, Alhaji Aliko Dangote and Mr. Femi Otedola.
Consequently, the consortium is demanding a refund of the $721m it paid for the acquisition of the refineries, with interests accruable.
The spokesman of the Bureau of Public Enterprises, Mr. Joe Anichebe, told our correspondent on the telephone that he could not confirm if the bureau’s Director-General, Mrs. Irene Chigbue, had received any notification of the withdrawal.
Anichebe stated that Chigbue could not be reached as she was attending a meeting.
Investigations by our correspondent revealed that Blue Star, in a letter dated July 17, 2007, announced its withdrawal from the deal.
The BPE had divested 51 per cent of Federal Government’s shares in the two refineries in May, just before the exit of former president Olusegun Obasanjo.
In the letter, Blue Star said it was withdrawing from the deal in view of the continued vilification of the consortium by the organised labour and some vested interests in the Nigerian National Petroleum Corporation.
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.”
As far as Blue Star was concerned, as noted in the letter, the purchase of the two refineries at the cost of $561m for Port Harcourt and $160m for Kaduna refineries, was a fair deal.
They added that, indeed, the price paid for the Port Harcourt refinery exceeded the reserve price quoted by the BPE.
According to the consortium, “Our interest in the refineries was borne out of patriotism (and our belief) that private sector participation would ensure efficiency and effectiveness in the operations of these refineries, which were expected to perform better than they did in the past.”
They argued that recent claims by the NNPC that it could run the refineries “more efficiently” contradicted “published data that showed an average of 35 per cent capacity utilisation between 1997 and 2005, which suggested the need for private sector participation.”
Under the terms of the agreement with the consortium, Dangote holds 55 per cent stake, Zenon Oil, promoted by Femi Otedola, holds 25 per cent, while the Rivers State Government and the Trans-national Corporation hold 15 per cent and five per cent respectively.
Meanwhile, the House of Representatives on Wednesday threw out a motion that sought to probe the sale of Port-Harcourt and Kaduna refineries, amid protest from many lawmakers.
The sale by former President Olusegun Obasanjo in the twilight of his administration has been a subject of national debate and investigation by the Senate.
Two related motions sponsored by Messrs John Agoda and Abdullaziz Abubakar, which were consolidated, triggered the debate.
Agoda‘s motion on the sale of Port Harcourt and Kaduna refineries was co-sponsored by three other lawmakers, while that of Abubakar on re-opening of the two refineries had 19 co-sponsors.