RE: Niger- Benin Pipeline Resumption19 Aug 2024 14:00
olderandwiser - ak hasn't lost sight of our organic potential. if you look at the accugas asset, we have been growing revenues year on year, and will continue to do so more materially post-uquo completion. as i mentioned in the earlier post, a lot of these things are purely around the macro outlook of the country you operate in and simply pure timing, nothing else. so uquo cpf completing this year makes more sense when the nigeria gas-to-power sector is going through reforms which encourage investments and growth, whereas this same capital investment 2 years ago wouldn't have made sense because a lot of our gas takers are power plants, and some of them in the past have not been able to take the gas because they have had technical challenges. but that's all changing now with the amount of investments being attracted to improve the grid network, power lines, power stations, gas turbines, etc.
again, as for niger, similarly ak made a conscious choice to defer any capital spend as he probably thought he would get better growth and value post niger-benin pipeline completion. so against this backdrop, the cumulative effect of a successful start of niger work programme will reflect better on our niger growth prospects than if we had continued to allocate capital in previous years when the pipeline was in construction. without a credible route to market (some will say the zinder refinery, but the refinery capacity was taken up by cnpc and it's a fairly small refinery), apart from the trucking route which was alluded to before, there wasn't a realistic route to market. the trucking route would have been an operational and logistical nightmare, and ak probably reflected on it and decided against it, rightly so if you ask me.
the big question: why did ak pursue acquisition opportunities when there is enormous potential in nigeria and niger? well, it's simple. for those of you who think he has forgotten about our existing operations or doesn't view them with equal importance, this is also wrong. as i highlighted above, he chose to defer capex on a pure timing basis to get the biggest value of the capital spend in the shortest timeframe possible post-execution. that's a sign of any good ceo; you want your return on capital to be able to be monetized as quickly as possible once in motion. so instead of sitting on his **** like most ceos would for nigeria gas market to improve or niger/benin pipeline to complete, he chose to grow the business in other areas like pursuing hydrocarbon opportunities in chad/cameroon, south sudan, and any that he has lined up not announced to the market as yet, and also continued to grow our renewable business where he has received financial backing and should be in construction next year.
if that's a sign of a failed ceo, than i can assure you most people need their heads examined, but i would rather have a ceo who is securing our business on all fronts while things on existing fronts align naturally.
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