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Petdrill epc 2013


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Petdrill epc 2013

  1. 1. Petdrill Development Company Gas Conversion Complex Delta State, NigeriaPresented by KINGSLAND GROUP Ma r c h 20 1 3
  2. 2. Petdrill Development Company Gas Conversion Complex Project EPC ProposalThis document contains proprietary information. Neither this document nor said proprietaryinformation shall be published, reproduced, copied, disclosed or used for any purpose other thanthe review and consideration of this document without written approval of Kingsland Group.
  3. 3. IndexThe VisionThe CompanyThe Business OpportunityThe ProjectThe Business PlanThe proposalSummary
  4. 4. TheVision The Petdrill’s vision is to create a world class gas conversion plant that will provide the benefits economically, empowerment, environmental enrichment and widespread employment of qualified natives and technocrats. The Company will reduce gas flaring in the Niger Delta region by developing a state of the art Liquefied Natural Gas conversion plant in Isoko North Local Government Area of Delta State. 4
  5. 5. TheCompany PETDRILL DEVELOPMENT COMPANY LIMITED was incorporated in Nigeria in the year 1992. The purpose of the company is providing oil and gas services in the petrochemical industry. The Company was formed with an objective for optimum utilization of flared gas in the Niger Delta. The Company is constructing a gas conversion plant in Oghere-Emevor in Isoko North Local Government Area of Delta State. Chief Daniel Ogwilaya founded and manages PETDRILL DEVELOPMENT COMPANY LIMITED since its foundation 5
  6. 6. BusinessCardChief Daniel Ogwilaya : Chairman & CEOChief Ogwilaya is a Bachelor of Science Degree in MechanicalEngineering from the University of Lagos.The Chief worked with Shell - British Petroleum Development Company of Nigeria from1971 to 1973 as a Pupil Petroleum Engineer. He joined OAC Nigeria Limited in 1973and worked as General Manager Engineering Division before commencing apartnership relationship with the Metrop Group of Geneva in 1975.The Chief served as Metrop Group’s local representative in Nigeria and Dahomey (nowRepublic of Benin) under the name SOGEXIM Agencies Ltd.The Chief managed these companies until the government of the Republic of Beninacquired Sogexim Benin and renamed it Metreaux Benin. The company was into themarketing and sales of crude oil and refined petroleum products. The Chief took overthe administration of Togo refinery in 1985 but left three years later due to seriouspolitical turbulence in that country.In 1990 The Chief formed Petdrill Resources Limited – an oil services company whichhad extensive collaborations with Chevron Nigeria Ltd and Shell PetroleumDevelopment Company of Nigeria.Petdrill Development Company Limited was incorporated to embark on the gasconversion project and fight gas flaring in the Niger Delta. 6
  7. 7. TheBusinessOpportunity Fully guaranteed payback of investment in relatively short period. Possibility of hooking up to additional projects with local government.Political connections of the Chief may open up additional doors inNigeria and Africa. Due to the dense presence of foreign companies in Nigeria, new business connections will be forged. 7
  8. 8. ProjectDescriptionGas from the well is transported to the plant viapipeline and trucks.The holding tank farm, the gas goes to theprocessing unit in the plan where the productssuch Methanol, Ethanol, Urea etc. will beextracted and residual gas is transferred for usefor the power plant. 8
  9. 9. Point of Collection VisualDescription LPG Alcohol 25 KM central unloading point 9
  10. 10. ProjectDescription (2) In the future, the transport of gas by trucks will be replaced with pipelines that will move the gas from all 32 fields to one central logistic point at the factoryArea of the 32points ofcollection forthe g as fr omg r o u n d 10
  11. 11. Producefromtheproject: The Gas Conversion Complex plant will turn out the following on a daily basis : • 400 metric tons of LPG (cooking and industrial gas) • 3,000 metric tons of Methanol • 1,000 metric tons of Ethanol • 2,000 metric tons of mixed alcohols • 1,760 metric tons of Urea for fertilizer • Residue gas to generate over 400 Megawatts of electricityThe Company will be utilizing 160 million standard cubic foot of Natural Gas at a flow rate of about 200 million standard cubic foot per day in the first phase of the project. This is slated to increase to 1 billion standard cubic foot of natural gas at phase two and three of the project. 11
  12. 12. TheProject-Marketing The mission of Petdrill is to improve the socioeconomic welfare of its shareholders and produce excellent returns on investments through community partnered initiatives. The company will achieve total revenue of over USD693M yearly. The company has of Japan (web site: as off - takers of the project for an initial period of twenty (20) years and renewable very two (2) years thereafter. Total value of contract over 20 years: 13,860 billion USDMarket Analysis The target market for Methanol and Ethanol is Japan and other Asian countries. The target market for LPG is Nigeria, other West African countries, Europe, North America and Asia The target market for Urea is Nigeria, other West African countries, Europe, North America and Asia respectively 12
  13. 13. TheProject-MarketAnalysis (2)Competitive AdvantagesThe competitive edge for Petdrill is a mix of significant factors, which includes but notlimited to the following: This will be the first full spectrum commercial gas conversion plant in West Africa. Cost savings will accrue from the reduced necessity to export LNG to foreign conversion plants for subsequent importation of the fractionalized products. Proximity to abundant gas reserves in the Niger Delta. *Possession of supply MOU with the NNPC and NGC. *Expansive (land) assets in the region. *Existing off-take agreement with Mitsui. *Growing national and global demand for products. A robust management team with strong experience in the Nigerian oil and gas industry. Deeply rooted relationship between the promoters of the Company and the host community. Favorable legislations by the Government on Oil & Gas projects. The presence of national gas policy makers in both the management team and the advisory board. 13
  14. 14. TheBusinessPlan The Total Project Cost - USD 1.8 billion The company has acquired the following acres of land for the entire project: 92 Acre for the factory site 150 Acre for workers Estate 50 Acre for Guest House to take care of clients and visitors 25 Acre for Jetty for export loading 5 Acre for office accommodation 14
  15. 15. TheBusinessPlan (2) Thebreakd ownis as following : Land 25,000,000 Workers Estate 23,000,000 Jetty Land 25,000,000 Licenses 12,000,000 Building : Office Complex 100,000 Gas Pipeline 350,000,000 Motor Vehicles 10,000,000 Jetty construction cost 10,000,000 Compensation to Host Communities 20,000,000 Plant and Machineries 800,000,000 Site preparation 130,000,000 Contingencies 200,000,000 Admin & other start up cost 1,000,000 Audit fees and professional charges 1,000,000 15
  16. 16. TheBusinessPlan (3)Income Forecast USD 693 millionMethanol ($ 250 MT) 224,352,000Ethanol ($ 270 MT) 52,254,720LPG ($ 750 MT) 36,288,000Urea ($ 600 MT) 380,160,000*Price of Methanol is set at reduced value of 50% in order be conservative* 16
  17. 17. TheBusinessPlan (4)BASICASSUMPTIONThe prevailing conducive and economic climate will continueThere will be no significant changes in the rate of inflation currently hovering around 13.8%there will be no significant changes in foreign exchanges rate currently hovering around 120Nigeria Naira per one United State Dollar.Government will neither enact new laws nor pursue policies that will affect the Oil and Gassector and in extension Petdrill Development Limited.Corporate tax rates currently standing at 32% and the payment policy of one year in arrears willnot be alters significantly.The company’s financial year will run from January to DecemberThe company will commence construction work by the end of the second quarter of the grant of theloan.The company will use 18 months to complete the construction work and installation of plants andmachineries.The current price of methanol and ethanol will be stable.There will be a 20% delay in revenue collection (20% credit allowance).Industrial harmony will prevent with little chances of workers’ strikes; disagreement; shut downsand likes.Natural unpleasant occurrences such as earthquakes; floods; bad weather will not occursignificantly as to affect the company’s operations significantly.Industrial hazards such as accidents will be minimized. 17
  18. 18. TheBusinessPlan (5)ProfitForecast 2014 2015 2016 $000,000,000 $000,000,000 $000,000,000 Turnover 693 776 916 Profit before Tax 392 474 612 Tax Profit after Tax 392 474 462 Dividend Provision 150 150 150 Retained Profit b/f 242 324 462 Retained Profit 242 566 Retained profit cash flow 242 566 18
  19. 19. TheProposalMain points of the proposal The total budget is assessed at 1.3 billion USD. Petdrill Ltd. will commit to bring finance at a rate of 5% of the construction budget, including collateral as per demand of the Chinese conglomerates. The company will achieve a total revenue of USD 693M yearly – as a minimum. 19
  20. 20. TheProposal (2)Structuring proposal for the EPC and funding The total project cost project is 1.8 Billion USD, which the Contraction budget is estimate at 1.3 Billion USD, while the initial capital is 5%, (meaning 65 .M USD). This amount should be seen as down payment during the first stage. The execution of the EPC of the project will include: Establishment of the plant Establishment of the hotel compound Execution of all pipelines and infrastructure All remains up to activation Financing of the above up to 95% of the construction budget (Assessed at 1.3 billion USD) 20
  21. 21. TheProposal–Technology (3)Petdrill Ltd. requests to consider purchasing the technology as perfollowing specifications 21
  22. 22. TheProposal-Financial (4)There are three options of structuring the collateral issue: Option A The Mitsui contract will serve as collateral. Option B Raw material (LPG, Ethanol, Urea, electricity, mixed alcohol etc.) could be provided as collateral as well. Quantity and duration are subject to negotiations. Option C EPC Company has option to bring in its own off taker, who may negotiate the purchase one or more products from the project. 22
  23. 23. SummaryViability - The project is viable given the fact that gas flaring is aGovernment policy and to harness the rich potential of the abundance ofoil and gas resources in Nigeria. This is the first time in the history of thecountry that the natural gas will be put into proper usage and alsojudging from the financial projections couple with the fact that thecompany already has an off taker for the project for the initial twenty (20)years.Technicality - The Company has engaged the services of world classEngineers Jacobs Engineering Group(Web site: of USA who is a major player in GasConversion Worldwide are the manager of the Conversion Gas Plant.With the availability of the financing of the facility, Petdrill DevelopmentCompany limited can easily construct and commission the Conversionplant and with a crack management team as envisions; technicalhandicaps will be reduced to the minimum 23
  24. 24. Summary(2) Profitability - The financial projections have shown that the venture will fare profitability. With a yearly profit before tax of USD392Million it is profitable to invest into the project. Liquidity - The cash flow statement in the financial projections section shows that the company will start making profit from the first year of operation as shown in the cash flow projection. The major cash outflow will be in dividend payment and loan repayment and attendant interests The cash flow statement shows that the company will meet its liabilities as and when they fall due. Furthermore; Petdrill Development Company limited will maintain a very good relationship with the bankers so that it can obtain funds from them easily to take care of unforeseen eventualities. 24
  25. 25. Summary(3) Community services - The Chief has graciously decided to offer theproducts, including electricity at a discounted rate for the people living inthe vicinity of the project – the area of his birth.The project creates 25,000 job opportunities for the people in the Deltaarea, an area pestered with a lack of jobs.The project will create improvement in housing, education and healthservices, i.e.: prosperity. 25
  26. 26. Thank You 26