CORRECTED-INTERVIEW-Gandur's AOG oil investment a return to African limelight

Tue Feb 5, 2013 6:05pm GMT

Quotes

   

(Corrects Gandur's title to chairman, not CEO)

* Aims to be top downstream firm in sub-Saharan Africa

* AOG will be rival to Vitol, Trafigura

* Says plans to invest in Nigerian oil bloc this year

* Hires new managing director of trading from Total

By Emma Farge

GENEVA, Feb 5 (Reuters) - Addax & Oryx Group (AOG) plans to invest $400 million in Africa's energy sector over the next five years, its Chairman said, in a strategic U-turn after sales talks collapsed last year.

AOG's focus on the African downstream will pit the privately-owned Swiss firm against rivals Vitol and Trafigura which are also vying for assets in sub-Saharan Africa as trading margins disappoint.

Many oil executives tip Africa as the fastest growing continent in the next decade, catching up with Asia which has fuelled commodities growth in recent years.

"We want to build more infrastructure in Africa, develop specialities like bitumen and liquefied petroleum gas (LPG), and will invest $400 million over the next four to five years," AOG's chairman Jean Claude Gandur said in an interview on Monday at his Geneva office.

The company, which has a smorgasbord of investments from gold mining to real estate, has 1,300 employees and already has storage and retail assets in nations like Mali, Nigeria and Togo and expects the number of employees to be 2,000 by year-end.

Ecobank Research said this week in its 2013 outlook that demand for fuels in Africa was likely to rise by 40 percent to 4.3 million barrels per day (bpd) in 2020.

Swiss industry veteran Gandur is best known for selling AOG's upstream assets to China's Sinopec Group in 2009 for $7.2 billion, a sale that catapulted him onto Forbes rich list.

He said AGO's Las Palmas fuels storage terminal on Spain's Canary Islands would start in September or October, placing the firm in prime position to meet west Africa's fuel import needs.

The company was planning to build around 20 infrastructure assets related to fuel distribution as part of the five-year plan, according to Gandur. South Africa would be the "next big push" for the company's expansion, he added.

"I lost a bit of time as I was in upstream. I have to use this five-year programme to get back in the number 1 position in sub-saharan Africa," Gandur added.

"It's a refocusing around the assets."

TRADING PLACES

AOG, founded by Gandur 25 years ago and named after two African antelopes, sought to sell its African trading and downstream assets last year but talks with a U.S. private equity firm fell through.

During this period, the company confirmed that it made 18 redundancies on its trading desk following the loss of key traders since the Sinopec sale to Geneva rivals SOCAR and Gunvor.

He said there would be no further redundancies on the trading desk which has now merged with the downstream business.

"Trading is for young people who are very, very hungry. I've done it. It's 200 days a year of travelling and sacrifices," said Gandur, who started his own trading career at Zug-based Philipp Brothers in 1976.

Asked if the company would replace its managing director of trading and distribution Emmanuel de Reynies, Gandur said he was already replaced with Philippe Evrard, a former chartering and crude oil trading manager from Total.

He added that the company would hire 18 staff members in Geneva as part of the Las Palmas project.

Industry sources had speculated that one reason why the sale fell through was AOG's partial exposure to a Nigerian fuel debt, estimated at around $3.5 billion, a premise that Gandur vehemently denied.

Other companies like Mercuria, Glencore and Vitol are also owed money by Nigeria's state oil firm.

"My bill was $250 million. We have reduced it by around 30 percent and we are not at the end of the queue for payments," Gandur said, adding most of the AOG debt was insured or shouldered by banks.

AOG, which also has five exploration blocs in Africa and the Middle East including Iraq's Kurdistan, will continue looking to invest in the upstream via its Oryx Petroleum branch, he said.

AOG was formerly a top producer in Nigeria before the Sinopec sale and still counts a former executive of Nigeria's state oil firm NNPC, Afolabi Oladele, on its board.

"We would like to buy more in Nigeria. It's an excellent basin and we feel very welcome in this country. It's an objective for this year to add more acreage," Gandur said. (Editing by William Hardy and James Jukwey)