Editorial

Trinity Energy sets sights at regional expansion

By Odongo Odoyo

I was so eager to find out what make Trinity Energy remain household name in the public domain when l came across a report compiled by Global Career Company which outlined the contribution of the indigenous leading oil company with records to have stood ground for better or worse situation to provide effective and affordable services to the citizens and the country without a blink.

The recent fuel shortage in the country is a good example where many dealers and operators rushed to increase fuel prices over 1000 SSP a litre but Trinity Energy remained with its old pump price of 330 SSP. This is one of the love and way of giving back to the society which is the principle of the founder and chairman of Trinity Holding Limited (THL)

Akol E Ayii, the soft spoken but a shrewd business guru does not waste any minute of his without doing something and isknownwith a track record of achieving success in revenue, profit and business growth objectives, founded Trinity Holdings in 2008 and went on to set up Trinity Energy Ltd in 2013. The company was named as the best petroleum company of the year in 2015 by South Sudan Chamber of Commerce and Industry for its role in contributing towards alleviating the acute fuel shortage the country was suffering and is now the main bulk importer of quality diesel and petrol in South Sudan. In this interview, he outlines the way his company is attracting highly skilled labour to South Sudan at the same time as fostering local talent. He also talks about his vision for expanding Trinity Energy in his own country and across the region.

wd business guru does not waste any minute of his without doing something and isknownwith a track record of achieving success in revenue, profit and business growth objectives, founded Trinity Holdings in 2008 and went on to set up Trinity Energy Ltd in 2013. The company was named as the best petroleum company of the year in 2015 by South Sudan Chamber of Commerce and Industry for its role in contributing towards alleviating the acute fuel shortage the country was suffering and is now the main bulk importer of quality diesel and petrol in South Sudan. In this interview, he outlines the way his company is attracting highly skilled labour to South Sudan at the same time as fostering local talent. He also talks about his vision for expanding Trinity Energy in his own country and across the region.

South Sudan has suffered from recurring conflict. What is your experience as an investor? What are the opportunities and challenges?

In South Sudan’s Oil & Gas sector, there are substantial opportunities given that South Sudan holds the third largest oil reserves in Sub-Saharan Africa. South Sudan currently exports the majority of its crude oil production and then imports all of its refined oil products, this scenario provides an opportunity for investment to add value to the country’s crude oil. We intend to invest in a refinery.

Secondly, because South Sudan is landlocked, efficient logistics and the existence of adequate fuel storage facilities are two important factors that will ensure energy security for the nation. The country has to truck its refined product imports thousands of kilometers from the ports. With national demand for petroleum products estimated to be about 70m litres per month and growing, one can see why it is imperative to have strategic reserves in-country. In order to meet this monthly demand, another investment opportunity exists: the setting up of a network of storage facilities in strategic logistic nodes or hubs across the country. This opportunity is in our sights and we are developing investment solutions that will give not only security of supply now, but also lend support to the establishment and operation of the planned crude oil refinery.

There are also a number of significant opportunities in exploration and production, E&P in short, in the upstream segment of South Sudan’s Oil & Gas sector. As a strategic investor on the ground, it is our long-term strategy to invest in oil field E&P opportunities.

Outside the Oil & Gas sector, there are opportunities in Mining, Agriculture, Infrastructure Development- the list is virtually endless. South Sudan is the world’s youngest nation, with a significant scope for growth.

Let me now address the challenges. True, we have had our fair share of difficulties and we have largely, as a nation, overcome them. We are all now focusing on ensuring that there is national peace in our beloved country. We all know that without peace, economic development cannot advance and the requisite foreign investment to develop the national economy cannot be realised.

The second fundamental component is to ensure that the Government adopts favourable policies that support the private sector and make South Sudan an attractive destination for foreign investment. The Investment Promotion Act is undeniably favourable in this respect.

The third major challenge has so far been the attraction and retention of talent. As you can appreciate, finding a diverse pool of human capital is at most times costly. Despite the increasing reliance on artificial intelligence, human capital remains an important component in developing and implementing strategic initiatives.

You mention that human capital is costly in South Sudan. How is Trinity Energy managing this challenge?

Attracting the required human capital is expensive, but we have no choice as we need to have in place a pool of diverse talent to implement our corporate strategies. In order to attract top talent from places like Kenya, Uganda, India and beyond, we have to cajole them with high remuneration packaging. Invariably, these are individuals that are looking for greener pastures, new challenges, or just want to be part of a success story. When we share our vision and mission with candidates, the majority readily step forward and come on board to join our growing team of professionals at Trinity Energy.

We have made it our deliberate policy to identify qualified candidates from abroad and position these experienced individuals in key management positions. Alongside this, we continuously scout for local South Sudanese men and women through an equitable selection process. They are then placed to work hand-in-hand with foreign counterparts as we are strong believers in mentorship, coaching and the transfer of skills and knowledge. In my view, this will benefit the entire South Sudanese economy in the long-term.

Some years back, South Sudan was hit with a fuel crisis that almost grounded its nascent economy. Where does Trinity Energy position itself in the market in addressing the fuel shortage problem?

The fuel crisis in South Sudan started in 2013 due to a mismatch between supply and demand. National demand from 2013 to 2015 was about 45m litres. Given the trade finance facility at hand then, the monthly supplies stood at 13m litres.

To exacerbate the problem, in 2016 the Government introduced and put into effect fuel subsidies. This was the catalyst that triggered and entrenched a fuel crisis that lasted until the middle of 2018. The subsidies made it uncompetitive for private sector players to independently import refined oil products and market them profitably. Under the subsidy regime, Nilepet – the national Oil & Gas corporation wholly owned by the Government – was responsible for all refined product imports. Unfortunately, Nilepet could not handle the market demand as a sole supplier.

As a company, we decided to put in place a reliable and sustainable refined product supply strategy. Firstly, we diversified into crude oil trading – we are the first South Sudanese company registered to lift crude oil. We currently export crude oil feedstock and add value by refining it abroad and reporting the refined products. This ensures energy security is always present in South Sudan’s economy through the consistent availability of refined products in the market. Currently, we import approximately 17m litres every month.

We hold a trade finance facility with Afreximbank that supports our ability to lift crude oil and subsequent importation of refined oil products back into South Sudan. Under this arrangement, we have delivered in excess of 150m litres of diesel and 29m litres of petrol to date. Through this trade finance mechanism coupled with Trinity Energy’s strategic storage depot located at Nesitu on the Juba-Nimule Border Road, we have assisted in stabilising the domestic energy market.

Where do you see Trinity Energy in the future, with the coming into effect of the African Continental Free Trade Agreement?

Our main objective is to become a regional player not only in the Oil & Gas industry but in the energy sector as a whole. We intend and plan to expand our operations and diversify our business portfolio. One of the main target markets that we will be looking at is neighbouring Ethiopia. Once we have our crude oil refinery established, Ethiopia will be an ideal off-take partner for a large percentage of our production output. Trinity Energy will also be expanding its retail network nationwide within South Sudan before expanding into regional markets.

In the short to medium term, we will be looking at supplying South Sudanese oil to neighbouring countries through intra-African trade with support from Afreximbank. We therefore welcome the African Continental Free Trade Agreement.

To sum it up, as an indigenous investor with a vision to go global, we look at challenges and come up with business solutions to serve not only our compatriots, but humanity in general. This is what gives us the energy to rise every morning and look forward to the future with hope.

South Sudan oil firm bids to set up a $500m regional refinery

By the East African

South Sudanese oil marketing giant Trinity Energy Ltd is set to inject $10 million worth of new investments in its Kenyan operations and also plans to build a $500 million crude oil refinery in South Sudan to serve the region with refined petroleum products.

The firm, which controls close to 40 per cent of the South Sudanese oil market, is planning a 40,000 barrels per day (bpd) modular refinery at Paloch in the oil-rich Upper Nile State, with the potential of expanding capacity to 200,000bpd, as well as petroleum storage facilities at Nesitu, in the south of the country.

South Sudan has the third-largest oil reserves on the continent after Libya and Nigeria, estimated at 3.5 billion barrels, with much of it yet to explored.

The refinery, to be built by American firm Chemex, is expected to be operational in two to three years, with plans to start distribution of refined petroleum products to Kenya, Uganda, Tanzania and the Democratic Republic of Congo by road, owing to the absence of railway and pipeline connectivity between these countries.

The EastAfrican has learnt that the feasibility study and the designs for the proposed refinery have already been concluded with Afreximbank together with big regional banks operating in Juba expected to provide financing.

“We are already making steady progress towards our refinery project. We have already identified and secured land for the refinery in Paloch. We have engaged Chemex of the United States as the project manager for this project. Separately we are close to tying up project preparatory work financing from Afreximbank and this will aid in the engineering and design work for the facility,” the firm’s chief executive Robert Mdeza told The EastAfrican in an interview.

“Various discussions are ongoing with financiers for the various facets of our business. We have opted for segmented approach so that we can kick off with the low-hanging opportunities such as our working capital requirements as we work our way towards financing for the larger projects like the refinery,” he added.

Competition

Trinity’s refinery will upstage Uganda, where the commencement of the construction of the $4 billion refinery at Kabaale in Hoima district has been pushed to 2025 following the delay in the conclusion of the Final Investment Decision on the basin-wide upstream oil development project.

Initially, the FID was expected to be reached in September and the projected completed in three years.

The Kabaale refinery is expected to process an estimated 60,000 barrels of oil per day with an initial output of 30,000 barrels per day at the time of the commissioning of the project.

Uganda, Kenya, Tanzania, Rwanda and Burundi had been allocated a combined 40 per cent shareholding in the refinery, translating into an eight per cent stake for each, with 60 per cent of the shares reserved for private investors. However, only Tanzania took up its full share of eight per cent while Kenya took up 2.5 per cent.

Rwanda and Burundi had not expressed interest in the facility by the expiry of the extended period set aside to do so in 2016. As a result, Uganda was compelled to take up an additional 11.5 per cent shareholding in the Hoima-based refinery, bringing its total shareholding to 19.5 per cent, with French oil giant Total SA taking up a 10 per cent stake.

Trinity Energy is not new to the region, and was incorporated in 2013 with majority ownership by Trinity Holdings which is 90 per cent owned by a local South Sudanese businessman Akol Emmanuel Ayii.

Currently, the firm supplies substantial volumes of refined products to South Sudan, effectively stabilizing domestic supply and demand for refined oil products.

“We are now embarking on our next phase of growth with major projects lined up in South Sudan including a 40,000bpd refinery as well as growing our footprint outside of South Sudan. This will be instrumental in our plans to enhance energy stability particularly for South Sudan and our landlocked neighbours,” said MrMdeza.

The country is seeking to increase crude oil production to pre-conflict levels of 350,000bpd, which is expected to significantly contribute to economic growth and sustainability.

Last year, Africa accounted for more than 7.9 million bpd in oil production, an output level that has significantly dropped from nearly 10 million bpd in the period between 2005 and 2010 largely due to lower global oil prices.

The construction of the refinery in Paloch is expected to strengthen the firm’s bid of expanding its operations across the East and Central African region through a combination of acquisitions and greenfield investments as part of its five-year (2020-2024) growth and expansion plan.

“Our strategy is to have a strong presence in East and Central Africa within the next four years, before moving to Southern Africa. This is part of our Pan African growth agenda. We will immediately focus on neighbouring countries such as Uganda, Ethiopia, Eastern DR Congo and the Central African Republic, which like us are landlocked countries that require energy security to support economic growth and future development activities,” said MrMdeza.

“If there is an opportunity for an acquisition, we shall look at them. We are keeping our options open some of which could be starting from the ground and some of which will be. So, our options are open, we are going for both Greenfield investments and acquisitions where possible,” he added.

According to MrMdeza, Kenya is also an important market for Trinity Energy Ltd due to the fact that the country is the biggest petroleum market in the region as well as the key entry point for petroleum products destined for the region.

Currently, the firm plans to revive its subsidiary in Kenya, which would play a significant role in its bid to expand its operations to other East African countries.

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