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Nigeria’s President was quoted as stating that over the last decade, Nigeria has lost an estimated $ 50 billion Dollars on account of the late passage of the Petroleum Industry Bill (PIB). In the month of July 2021, KPMG released a report that stated that 4 percent of the $70 billion investments in the African oil and gas industry pertained to Nigeria. Said figure is considerably below what ought to be expected, especially as Nigeria is the largest producer of oil and gas and possesses the largest proven reserves continentwide.
On the 16th of August 2021, President Muhammadu Buhari signed the Petroleum Industry Bill (PIB or “the Bill”) 2021 into law. The PIA purported to introduce needed changes to the governance, administrative, regulatory, and fiscal framework of the Nigerian Petroleum Industry. For example, the Nigerian National Petroleum Corporation (NNPC) is to be stripped of its regulatory role and assume a restructured role as a purely commercial entity.
The provisions of the new legislation and the Petroleum Industry Fiscal Framework aims to create a conducive environment for business and investment in Nigeria, unfortunately this law has come at a time the world is seeking to reduce its reliance on fossil fuels and the major global energy investments are being made in the renewables sector. The prevailing global sentiment has influenced a massive shift in sentiments, said sensibilities have influenced global legislation, with governments incentivizing the reduction of carbon footprints in the public and private sectors.
Following the global pandemic and a President Trump inspired price war that sent global petroleum prices tumbling in 2020; a new oil price super cycle seems to be in the making. Said cycle is driven by pervasive supply shortages from shale oil production and demand growth triggered by strong post-pandemic recovery by large economies, a big stimulus package in United States, and global optimism about vaccines.
For a country like Nigeria that is ranked as the sixth largest producer of crude in the world, one would expect the downstream sector would be abuzz with significant investments and activities. Unfortunately, the reverse is the case, the sector is currently bogged down by numerous challenges, such as inappropriate product pricing, product supply concerns, insecurity, non-functional/under functioning refineries etc.
To encourage investment in the downstream sector, there is need for partnership to exploit the potentials in the sector. Quest Oil & Engineering Services Limited, an indigenous energy provider in Nigeria and owner of Ascon Oil Company, is bringing investment into the sector through a unique franchising model, known as CODO, short for “Company Owned Dealer Operated”.
In just a decade of operation, Quest has become a household name owing to its bold and visible market strategy, diversity of investments across the downstream value chain and an expanding network of over 35 company owned retail stations in all 6 geopolitical zones. Quest also boasts of storage terminals with a combined capacity of 80 thousand metric tons, a 10 thousand metric ton gas storage facility (scalable to 15 thousand), a lubricant blending plant, IATA and DPR certified aviation terminals, strategically positioned LPG skids and other investments.
Quest is proud to state that its business reach is rapidly growing to meet the needs of the market. The acquisition of Ascon in 2019, provided a platform to deepen the footprint of the company in the downstream sector. The merging of Quest and Ascon strengthens its industry positioning and brand by leveraging on the reputation of Ascon as a leader in quality products and the acclaimed dynamism of Quest.
This impressive growth trajectory, according to the Quest GM Business Operation; Dr. Ochuwa George, has been largely due to the consistency of the brand, its customer-centric approach and focus on value creation.
According to the Head of Sales and Marketing Mr. Ukwa Anya; “Through this CODO franchising model, we offer the public a unique opportunity to partner with one of the best and fastest growing petroleum retail brands in Nigeria”. He further stated that “promoting the CODO arrangement is our reinvigorated strategy to expand the value base of Quest and build on our mantra of: “quality, integrity, and excellent service delivery” which the brand has consistently made their watchword over the years”.
Regarding the recent unveiling of Auto-gas venture by the Federal Government, Quest is positioned to take advantage of the opportunities offered by this initiative, the company has expressed its willingness to partner with investors to develop and deploy Compressed Natural Gas (CNG) in all its service stations. As a forward-thinking organization, Quest is well aware of the global shift from crude oil to gas and will play a pioneering role in developing the country’s natural gas resources.
Interested investors in the CODO partnership will enjoy the comparative advantage of guaranteed product availability and strategically located Quest retail stations along the prolific economic corridors across the 6 geopolitical zones. Location considerations for the Quest enterprise are of great importance. This is on account of the fact customer convenience, visibility and accessibility were the deciding factors in the choice of locations of the service stations.
The CODO contract terms include a profit-sharing arrangement which is in line with industry standard. Expected qualifications from the investor include funds equivalent to one truck of diesel (AGO) and one truck of petrol (PMS) as well as ₦ 2 million worth of lubricant.
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