Monday, December 29, 2014

Letter from Nigeria: Hey Philly, I'll buy your oil refineries!

Plus a job offer for your correspondent

Letter from Nigeria: Hey Philly, I'll buy your oil refineries!

Email of the Week:

Dear Joseph N. Destefano (sic)
Good Morning to you.

I have been reading some of your articles on Philly[.com] and I appreciate how informative and educative they are.

I have been reading about the sale of the Sunoco Oil refineries (Marcus Hook and the other one) 178,000bpd + 335,000bpd. I have tried to reach the Director of Marketing via the telephone, but it was automated messages response.

I believe I have a workable proposal to swing this deal and save over 15,000 jobs and keep the Refineries running. The major features of the proposal are:

We will not be buying 100% stake in the refinery. We will like the community or the city council to keep 10% stake. If they do not have money, we can arrange refinancing for them pledging some of the asset of the refinery.

Also, we believe that if the Community or the City has a stake, there will be a sense of belongingness. I doubt whether the guys in Sunoco Oil may want to do such an arrangement.

From the press reports given by the last CEO (Lynn Elsenhans) to the new one Brian Macdonald, I think they want a either 100% ownership or outright sell. If I am wrong, I am open to negotiations with them if you are able to get them set the ball rolling. This means in addition to the skilled Management Staff that will be retained based on recommendations from a top Consultant from your state, The Community or the City Council will have 2 Board seats in the new arrangement.

The feed for these Refineries is Light Sweet Crude (mainly from West Africa). My proposal is to get Crude Oil Allocation that will feed them and at least 80% of the refined products would be sold back to base (the Country of Origin). The remaining 20% will be sold in the USA if the pricing is competitive.

We have strong contacts in Governments of Oil Producing Countries in West Africa that will be willing to enter into a JV with us over this transaction. We cannot go ahead to discuss with them without having a clear picture of what is being sold, the terms, technical arrangement, cost and Government Policy. Suffice to say that without being biased, the transaction will be transparent. If this deal goes through, we may take on ConocoPhillips Trainer Refinery facility.

We believe this deal is workable because the time and other logistics to build a refinery of the magnitude of Marcus Hook etc is long and strenous.

I will not mind if you will be a Consultant for us, if you will agree to go with us on this deal. We will need to agree on the terms.

The justification for this proposal is that there are still very good business opportunities in the Crude Oil Refining Business otherwise, Glencore would not have done the US$90bn merder with Xstrata.

Our Short term goal is to make the Refinery active and producing at minimum of 60% capacity, while our middle and long term goal is to make it a Global Brand with the attendant economic benefits to Philadelphia economy. We also believe that this deal will create jobs for over 10,000 people in the West African country used as a platform.

Kindly let me have a response at your earliest convenience.

Have a wonderful day and best regards.

(Names of writer and firm withheld despite request.) 

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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