Orient Petroleum

Refinery
Investor Presentation
2
AGENDA
AGENDA
Company Profile
Business Overview
Financial Highlights
Fact Sheet
Risks & Mitigants
Pre-IPO Strategy & Listing Timeframe
Competitive Advantage of Orient Refinery
3
Group Mission
Group Mission
To harness the huge but untapped
hydrocarbon deposits, abundant
agricultural and human resources for
the well being of the people of Nigeria,
while creating value for shareholders.
4
Company Structure
Company Structure
Orient Petroleum Resources Plc
Corporate Office
Administration
Human Capital
Finance
Audit
HSES
OPR-Refining &
Petrochemicals
Company Ltd.
Refinery
Petrochemicals
Fertilizer
Lube Oil & Asphalt
OPR-I&S
Housing Estate
Utilities, Roads
Airstrip
Recreation
Hospitality
OPR-G&P
Gas Processing
Gas Transmission
Power Generation
and Transmission
OPR-E&P
Oil & Gas
Exploration &
Production
Subsidiaries
5
Anyaoku - former Commonwealth Secretary General and President WWF
Ekwueme former Vice President of Nigeria
Nwawka former Deputy General Manager, Shell Nigeria
Okoye former Terminal Assets Manager, Shell Nigeria
Akuezumba former Head Asset Engineering, Shell Nigeria
6
A N A M B R A
Refinery Location
Lagos
Abuja
NIGERIA
7
Business Objective
Business Objective
develop and operate 55,000 bpsd oil refinery
feedstock from OPLs 915/916 oil fields and other
nearby oil fields in Nigeria
develop associated infrastructure
8
Import Substitution
Captive Market
Favourable Location
Feedstock Available
Attractive Margins
Business Case
Business Case
Nigerian Market Gap
10% Existing
Refineries
90%
Imports
After OPR-R&P start up
Currently
80%
Imports
10% Existing
Refineries
10% Orient
Refinery
9
PMS
DPK
AGO
Others
Consumption by
Refined Product
Location advantage
Access to 90% of market
Refinery to produce PMS, AGO, DPK & LPG.
CONSUMPTION
BY ZONE (%)
ABUJA 3
NORTH CENTRAL
20
NORTH WEST
6
NORTH
EAST
4
SOUTH WEST
31
S.E.
8
SOUTH
SOUTH
29
Refined Products Market
10
OPLs 915 & 916 contain 1 billion bbls Oil/Condensate & 30 TCF Gas
Refinery located inside OPL 916
Feedstock Availability
Refinery Site
11
Full conversion refinery yielding value added products
Receives crude oil, refines & markets products in-situ
Compared with imported products, refinery eliminates cost of
currently associated logistics.
Product pricing mechanism guarantees refining margin
Retail outlets to harness distribution margins
Favourable tax regime for pioneer status
Refining Margin
Refining Margin
12
Financial Forecast
Financial Forecast
1.4
35%
35
72%
72
31.79
(30.03)
61.82
339.95
N bn
2011
OPERATING
1.3 1.3 1.4 2.6 - Forecast Price/Earnings ratio at Offer Price
40% 40% 30% 23% - Forecast Dividend yield at the Offer Price (%)
40 40 30 23
- Forecast Dividend per share (Naira) *
79% 75% 69% 38% - Forecast Earnings yield at the Offer Price
79 75 69 38 - Forecast Earnings per share (Naira) *
33.88 29.75 33.78 12.68 - Retained earnings to reserve
(34.32) (34.32) (25.74) (20.04) Proposed Dividend
68.20 64.07 59.52 32.72 - Profit After Taxation
346.78 343.35 336.58 168.29 - Turnover
N bn N bn N bn N bn N bn
2013 2012 2010 2009 2007-2008
OPERATING OPERATING OPERATING OPERATING
CONSTRUCTION
PERIOD
(*Note: Forecast Earnings per Share are based on 858,000,000 called up Ordinary Shares of 50kobo each)
US$1=N120
13
Funding Plan
Funding Plan
Total Project Cost US$660m
$60m
Current
Spend
$550m
EPC Contract
$50m
Non - EPC
Refined
Products
Distribution
Facilities
$82.5m
(15%) by
OPR
$467.5m
(85%) by
China Eximbank
Funding
Plan
Priv. Placement: $32.5m
$50m from Private
Equity and or Bond
Debt :
3 yrs moratorium
& 5 yrs repayment
Private Equity
and or Bond
14
Working Capital &
Feedstock Inventory $80m
Equity/Bond Target $180m
Balance of 15% OPR-R&P
Complementary equity $50m
Non-EPC Refined Products
Distribution Facilities $50m
15
Fact Sheet
Fact Sheet
Jun., 2002: OPR awarded License to Establish 55,000 b/d Refinery
Sep., 2003: DPR, MPR reviewed & approved OPR Refinery Basic Design
Feb., 2004: OPR awarded 1
st
ever Approval to Construct Oil Refinery in Nigeria
Feb., 2005: FEED contract to SS&W, USA & EIA due process completed
Feb., 2005: FGN awarded 2 License blocks (OPLs 915/916) to OPR
Apr., 2006: Site preparation by JBN & other geotechnical consultants
20th Apr., 2006: President Obasanjo laid foundation stone of refinery
Dec., 2006: BPDI, China selected & awarded $550m EPC contract
Dec., 2006: China Eximbank issued LOI for 85% funding
Jan., 2007: UBA accepted to serve as repayment guarantor
Feb., 2007: Team of BPDI visited site & completed layout design
Mar., 2007: Min of Energy issued comfort letter to China Eximbank
Nov., 2007: Basic Design Review completed in Beijing, China
Dec., 2007: Topographic Surveys and water wells completed.
Dec., 2007: Geotechnical & Hydrogeological investigations completed
Jun., 2008: Ministry of Energy, issued ATC validity assurance letter
Jun., 2008: Min. of State (Petroleum) issued feedstock supply assurance letter
Jul., 2008: Civil & Foundation works ongoing by RCC Nig. Ltd.
16
Risks and Mitigants
Risks and Mitigants
17
Refinery License
Refinery License
18
EIA Certificate
EIA Certificate
19
The 5-Point Strategy
nHuman Capital Development & Economic Empowerment
(Scholarships, Employment, Business & Investment Opportunities,
Estate Value Appreciation)
nSelf Ranked Project List per Community
nSustaining & Enhancing Traditional Occupations
nBoard Representation
nRegular/Continuous Communication
Community Relations
Community Relations
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CNG PLANT - INDUSTRY &
AUTOMOBILE
LPG PLANT - COOKING GAS
REFINERY - PETROL, KEROSINE
DIESEL & JET FUEL
POWER PLANT - POWER HOLDING
GAS PLANT
CRUDE
OIL
PRODUCTION
PLANT
REFINERY - LUBE OIL
BOTTOMS - ASPHALT
NGLs - NATURAL GAS LIQs
Zero Waste Concept for
Environmental Management
Zero Waste Concept for
Environmental Management
21
Site Works
Site Works
RCC Contract
Signing
Site leveling
for foundations
Completed Water Well
22
Geotech & Water drilling
Geotech & Water drilling
Geotechnical works Water Well drilling
23
CofO
LtE AtC EIA
Orient Refinery Project Execution Schedule
2007 2008 2009 2003 2004 2005 2000 2001 2002
17
8
9
10
11
15
14
12
13
16
Commissioning
Feedstock Sourcing
FMEnv Engagement
Approval to Construct
FMEnv Certification
Engineering
International EPIC Tender
Funding Arrangements
Construction
Procurement & Yard Fabrication
7
DPR & MPR Engagement
6
Basic Design
s/no
1
Land Surveys & Acquisition
Licenses (LtE, AtC, EIA, CofO, etc)
2
Participatory Communities Relations
Preliminary Activities (Concepts, Oil & Gas
data collection & analysis, Investors' Forum, Visits)
Environmental Impact Assessment (EIA)
3
4
5
2006
EPC
Project Schedule
24
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
A
1
2
3
4
5
B
1
2
3
4
C
1
2
3
4
D
1
2
3
4 Commissioning Process Units
2008 2009
Commissioning Utilities
Orient Refinery EPC Schedule
Plant Mechanical completion
COMMISSIONING
Pre-comm Utilities
Pre-comm Process Units
CONSTRUCTION
Civil Works - Roads, Tanks, etc
Utility Units
Other Items Procurement
Yard Fabrication
Refinery Modules Shipment
Utilities Design (Power, Steam, Water,
PROCUREMENT & YARD FABR
Long Lead Items Procurement
Site Installation - Piping, etc
FEED Optimisation (Basic Eng. Rev.)
Layout & Levelling Design
Foundations Design
Process Units Design (Tanks, Vessels, etc)
s/no 2007
ENGINEERING
Design
Review
in China
Resume on-
site Works
Fab yard
work
review
1st eqmt
shipment
2nd eqmt
shipment
Start
Refinery
Test run
25
Management Structure
Management Structure
GM Refinery
HSE QA/QC
Security HSES
External
Relations
Company Secretary/ Legal
Services
Board of Directors
Managing Director
Corporate Affairs
Manager
Commercial
Services
HR & Admin
Internal Audit
(Logistics, Materials, etc)
Finance
Manager
Marketing
Manager
Operations
Manager
Maintenance
Manager
Supply Chain
Services
26
IPO & NSE Listing Plan
IPO & NSE Listing Plan
n Introductory private placement 2007
n Conclude IPO in 2009
n File for listing on NSE by Q12009
27
Competitive Advantage of Orient Refinery
Competitive Advantage of Orient Refinery
Minimum of 4 years required by competitors to develop new refinery
Assured Feedstock OPL 915/916 and from other nearby oil fields
Vertical Integration crude supply, processing & distribution
In-situ Operations compared to crude & products export/import logistics
Private Ownership - ensures efficient & focused management
Inland Location central to the market & transportation network
Captive Market growing demand will quickly consume capacity increase
Suppliers Market scarce products payment made in advance
Tax holiday and favourable tax regime
28
P/E Ratio Comparison
29.5
46.87
17.75
62.6
1.35
0
10
20
30
40
50
60
70
Sasol Petrobras Jordan Pet
Refinery
PetroChina OPR-R&P
29
Head Office:
OPR-Refining & Petrochemicals Plc
Lion House, Abuja Estate,
Enugu Onitsha Expressway,
Opposite Government House,
P. O. Box 3002,
AWKA. ANAMBRA STATE
Telephones/emails:
Managing Director Engr. E. N. Nwawka (08037113496) nwawka@oprplc.com
Executive Director Engr. S. E. Okoye (08067315953) sokoye@gmail.com
Executive Director Engr. I. E. Akuezumba (08057185088) engriyke@gmail.com
CONTACTS
CONTACTS
30
THANK YOU
for your attention
THANK YOU
for your attention