Forte Oil announced plans to sell its upstream and power businesses in Nigeria and also divest from Ghana, to focus more on fuel distribution in Nigeria.
The move comes as a surprise, as CEO Akin Akinfemiwa had told investors, back in August, that the company wants to acquire oilfields to boost its upstream business.
The company did not give any reasons why it decided to switch course but said it wants to focus more on the downstream. It anticipates that the downstream sector might be deregulated, especially given its impact on the Naira and import bill.
The company, however, did not indicate how much it is expecting from the sale. Forte Oil’s shares plunged 49% last year because of a scarcity of foreign exchange to import refined products.
Its Ghana unit declared losses over the last three years due to tough economic conditions and currency devaluation in the cocoa-rich country. Proceeds from its Ghana divestment would be used to expand its downstream fuel distribution and to invest in the storage infrastructure.
Forte Oil now plans to seek shareholder approval for both the sale and the appointment of adviser on May 23
Photo Credit: Nairametrics
