Nigerian energy firm, Forte Oil, on Wednesday said it plans to quit operations in Ghana.
Reuters reports that the firm plans to sell its upstream services and power businesses in Nigeria and divest from Ghana to focus on its core fuel distribution operation at home.
The move comes as a surprise for a company that recently announced plans to aggressively pursue opportunities along the energy value chain.
Forte Oil’s Chief Executive, Akin Akinfemiwa, told investors in Lagos in August that the company also wanted to acquire marginal oilfields to boost its upstream business.
Reports said the company, majority owned by billionaire Femi Otedola, had also been in talks with a major refinery to form a strategic partnership for local refining of petroleum products.
Forte Oil’s share price plunged 49 per cent last year after the company struggled to get hard currency to import products. It now has a total market value of 57.3 billion naira ($188 million) but gave no indication on Wednesday of how much the businesses for sale might fetch.
It said interest costs attributable to the businesses to be sold stood at N2.2 billion as of December and It now plans to seek shareholder approval for the sale on May 23 and appoint advisers.
In 2016, the Nigerian government increased petrol prices by 67 per cent to 145 naira to cut subsidies paid for fuel imports. The development came after a plunge in oil prices hit state revenues, caused dollar shortages and halted infrastructure projects with firms laying off tens of thousands of workers.
The hike however did not prevent gasoline shortages which have plagued Nigerians for much of 2017 and 2018.
In a notice, Forte oil did not give a reason for the change in direction but said the downstream sector in Nigeria had gone through changes in recent years and was expected to evolve further.
It added that the industry has operated under a tightly regulated fixed margin but could be deregulated especially given its impact on the Nigerian currency and import bill.