Total invests N15b in downstream operations since 2010

•Plans 60 new filling stations

TOTAL Nigeria Plc has estimated its downstream investment in Nigeria between 2010 and 2013 at about N15 billion ($100 million), even as it unfolds plans to build additional 60 new filling stations across the country.

According to the company’s Managing Director, Alex Vovk, the investment profile was made in line of importation, storage and distribution of petroleum products, fuels or specialties products such as lubricants and Liquefied Petroleum Gas through retails, industrial and aviation channels of sales in the downstream sector.

Speaking at Oil Trading Logistics (OTL) Africa Downstream 2013 Expo in Lagos, Vovk said: “Total has a long term view of Nigeria and this is emphasized by the level of our recurring capital expenditure,”

Also, the company disclosed that by 2017, additional 60 filling stations would be added to the 540 stations currently owned by the company across the nation.

“We have gone a step further by transforming our network of stations from the old typical fuel station to a multi-service offer stations. This has led to introduction of shop services, modern lube bay and car wash centres,” he said.

Vovk said new projects to be embarked upon by the company include greener energies to fight deforestation; and provision energy to lower income Nigerians through the proposed solar lamps.

“Diversification in terms of moving with trend has earned our company beyond expiations and safety management system is doing nothing less than investing heavily in making transportation of liquid hydrocarbons safer,” he said.

Having boast of the various innovations from the company, Vovk, however, berated the unfavorable business environment in the country, which he said, has drastically affected returns on investment.

“And the current situation in the Nigerian fuel market is that these returns are clearly not there, and this is a cause for concern by everybody, including the regulators and the authorities,” he stated.

He lamented that the marketing margin, which is generating the cash flows has not been reviewed since 2007, adding that the cost of doing business has increased substantially in the past six years.

He added: “Cumulative inflation, which impacts operating expenses, was 70 per cent; devaluation, which impacts cost of investments, was 27 per cent; the rising insecurity is also adding significant costs to protect people and assets, not to mention the ever increasing and ever more confusing burden of local and federal taxation. This is not sustainable and the margin should be reviewed to really cater for the cost of doing business in the Nigerian environment.

“So, I appeal to the regulator to review the margins because what is at stake is the essence of what the regulator should provide to the Nigerian customers and to the country: What a growing economy needs, is a supply of energy that is adequate, reliable, available, where standards of quality are guaranteed, and competitively priced. And today this is at risk,” he said.

By Sulaimon Salau, November 7, 2013