Forte Oil CEO sees profit tripling on power investment

Forte Oil Plc, an operator of petrol stations in Nigeria, expects profit to triple next year as investments in electricity generation drive up revenue, reports Bloomberg.

“Group net income will be up to N11 billion from a conservative net-profit estimate of N3.4 billion for 2013,” chief executive officer, Akin Akinfemiwa, said in Lagos. The power business will account for almost N5 billion of the 2014 total, he said.

President Goodluck Jonathan handed control of 14 power plants to buyers including Forte Oil and Siemens AG in September to secure funding for the facilities and end frequent blackouts. Forte is also studying possible oilfield investments, as well as ownership of a refining and petrochemicals plant, to diversify in the energy industry and expand in West Africa.

“Forte plans to be at every point of the energy value chain, from the oilfield to the retail fuel pump,” Akinfemiwa said. It’s seeking to “maximise synergies,” he said.

The company is the best performer on the Nigerian Stock Exchange All-Share Index this year, jumping more than eightfold, compared with a 33 percent gain for the index as a whole.

Forte will start operating the 414-megawatt Geregu power station on November 1, Akinfemiwa said in an October 25 interview. The company will ensure adequate gas supply to run the site at full capacity, up from 60 percent, according to the CEO, who said it’s an “immediate revenue earner.”

Profit in the nine months through September rose to N2.7 billion from N656 million a year earlier, Forte said October 21. Sales climbed 29 percent to n92.1 billion.

Forte may participate in bidding for Royal Dutch Shell Plc oilfields, Akinfemiwa said. The company is also considering building a refining and petrochemical site in the “long term,” he said, without elaborating.

Shell and Chevron Corp. are selling onshore and shallow-water assets that can produce a combined 300,000 barrels a day. Stakes in 13 other fields have been sold by Shell, Total SA and Eni SpA since 2010 following persistent unrest, violence and crude-oil theft in the Niger Delta.

Nigeria relies on fuel imports to meet more than 70 percent of its needs. Four state refineries with a combined capacity of 445,000 barrels a day are operating at a fraction of that because of poor maintenance and aging equipment.