We must review professionalism, regulation after Ikoyi building collapse – Raji, Odu’a Investment GMD - Punch Newspapers
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28 November 2021The Group Managing Director of Odu’a Investment Company Limited, Mr Adewale Raji, speaks on the state of the real estate sector, the nation’s investment landscape, and other issues, in this interview withDAYO ADENUBIYourcompany has reportedly won the Bita Oil and Gas marginal field. Have you paid your signature bonus for the field and how do you plan to raise funds to develop the field?
The Bita marginal field was awarded to us and another partner by the Department of Petroleum Resources. We have 48.76 per cent and the other partner has 51.24 per cent. The bid amount has been paid and we have also paid the signature bonus. As it stands now, we and our partner have jointly incorporated a new Special Purpose Vehicle called Bita Exploration and Production Limited. It is this field we are now using to discuss with Chevron which through what is called a farm-in agreement will hand over that asset to us. They will give us all the data relating to that and the DPR has already written to that effect, so we are in engagement with Chevron at this point. It is on that basis that we are going to talk about the field development plan. There are indications at this point that we may not need much investment, just about $20m to go for first oil. But the estimate that we have is that the total investment might require between $120m and $150m. Our strategy, having paid up the signature bonus, is to sit down and listen to people who will offer financial and technical participation on the basis that they can also take equity in the whole project. So, that is our strategy, where those who have the technical capability and the financial muscle will come in and negotiate with us. They take equity, bring in the funds and the technical know-how so that we can produce oil from the field. Much of the funding is going to come from equity participation. As it is now, we and our partners are joint 100 per cent owners. Maybe ultimately, because of the investment that is going to come, there will be a dilution where at the end of the day, we will share that field with those who bring the funds and technical know-how. What is quite clear is that the asset belongs to two partners.
What does the Ikoyi building collapse portend for the real estate sector considering the fact that your company is a key player in this sector?What I think it portends for Nigeria is that we have to take professionalism and regulation to the next level. It has to be at a level where in deploying what we called a great structure, we must also have to be very accountable and transparent about it. What I mean is that, the process for enquiries, applications, permit approvals needs to open up to be far more transparent. It should be one that if I live in the neighbourhood and I see people just hitting the ground and building something, I should be able to go online and be able to get minimal knowledge about what they are doing there. What that means is that that the information is available to me because that process has been made to become transparent. I think that is what we need to require. There are tremendous regulations going on there but I think there is a level of opacity in it. It means even when you hear from people who are in the sector who know about it, it is like a camel trying to pass through the eye of a needle. We need a higher level of transparency such that we will be able to validate who is there. On the basis of knowing that, I believe that charlatans will easily be weeded out. Because what it means is that with that openness, it will be such that if you are somebody who is cutting corners, straightaway with social media, we will say “oh you are doing this development, how did you get the permit?” We will even write petition and objection, but transparency has to come in. I know there are lots of regulations going on, but most of them are not known to the public. We have to build this credibility so that people will have the confidence that we have an openness where people on their own can make enquiry and get satisfied. And we will be relieved of ignorance, otherwise, it is the peddling of rumours that will keep going on, which is a big challenge. headtopics.com
Your company has also revealed plans to expand into several sectors including insurance, oil and gas, real estate, and hospitality. How do you plan to achieve effective oversight on all these areas?Calling us a conglomerate is because we are playing in multiple sectors but from the strategy we have unveiled, SRC 2025, you will see that we have tried to limit ourselves to eight sectors, and you will see that we are already playing in some of them. Some are new; like e-commerce, logistics etc. They are new in the sense that we know they are relevant for the present and the future, and we must look for means to participate in them, aside from the sectors that we have traditionally been operating. Agriculture is one sector that we have been playing in, but we need to go deeper. We should not just be quoting the money we made from agriculture, we should also be quoting the jobs that we have created, the raw materials we are providing for industries, and we should be talking about the internally generated revenue that comes from that business. The whole idea about using strategic partnerships is that it allows you to have a larger footprint. Also, we are gaining specific expertise in those areas. In other areas, we talk about the strategy to “revive.” We had 60 per cent shareholding in the Nigerian Wire and Cable Limited in Ibadan at the beginning, but It failed because of governance issues and others. The truth today is that there is still a very high demand for cables in Nigeria. So under the revive strategy, if we get the right partner with technical capability, we will want to enter into cable again. However, we must enter on the basis that we have a partner that is already attested nationally or globally, to be a leader in that sector. We will leverage this because we know the market is there. We know our shortcomings in terms of being the operators of the business. We have to make sure that in entering a partnership, we have taken care of the technical management and the financing. We will build capability in terms of the investment framework and guidelines. That is the reason why we decided in the group head office to move into a lean non-operating business. Our main expertise will be in the core areas of investment. Our capability will not be built in operations but in relationship management, alliance formation, partnership creation, and joint ventures setup. We will make sure we have top-notch people who can do project appraisals, and make sure that requirements in terms of return on investment, internal run rate, return on assets are all top-notch and you are doing benchmark comparison in the industry. We should be able to use our balance sheet which is over N150bn to leverage money to do investments.
The Sweat, Revive and Create 2025 plan of the board says the board anticipates that the business will expand revenue by more than 500 per cent in five years. Are you not being over ambitious?Read more: The Punch Newspapers »
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