Nigeria’s richest woman, Folorunsho Alakija, was forced to fight for her wealth. This is her story

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She’s Nigeria’s wealthiest woman and Africa’s second-richest woman in 2014. Meet Folorunsho Alakija

Nigerian oil tycoon Folorunsho Alakija (63) is estimated to be worth a whopping $2,6 billion (R28,8 billion) according to Forbes magazine.

First Alakija studied to become a secretary, and according to Ventures Magazine, in the 70’s worked as a secretary at the now-defunct International Merchant Bank of Nigeria. She decided to quit her job in the early 1980s and studied fashion design in London, England before returning to Nigeria to put her new design skills to use, founding Supreme Stitches. The company designed clothes for Nigeria’s elite, including the country’s former first lady Maryam Babangida, who was known for her impeccable fashion sense. It was with this business that Alakija started building her wealth.

In mid-1993 her company Famfa Oil Limited, which was founded in 1991, applied to be allocated an Oil Prospecting License (OPL). This would allow them to look for oil on a block of land the company owned close to the Nigerian coast.

Many of her peers who were granted OPLs for blocks of land with deep oil reserves sold their licenses to international oil giants for a profit. But Alakija chose instead to form a partnership in 1996 with Chevron’s Nigerian affiliate company, Star Deep Water Petroleum Limited that had extensive knowledge about running an oil field.

The deal was that the company would run the technical aspects of the exploration for a 40% equity stake in the venture. Star Deep later sold 8% of their share in the company to a semi-public Brazilian multi-national energy corporation, Petrobras. Alakija and her family retained 60% ownership of the business. Under Star Deep’s leadership the company dug their first appraisal well, and discovered the equivalent of one billion barrels of oil in 2000. According to PremierOil.com an appraisal well is defined as a “well drilled after the discovery of oil or gas to establish the limits of the reservoir, the productivity of wells in it and the properties of the oil or gas”.

In 2003 the Nigerian government wanted a share in this. President of Nigeria, Olusegun Obasanjo, ordered that the Nigerian National Petroleum Corporation (NNPC) be given a 40% stake in Famfa’s OPL 2 under the Back-in-Right Regulation of 2003. This would give the Nigerian government rights to take part in any OPL or OML.

FIGHTING TO KEEP HER WEALTH

This would give the Nigerian government the rights to her oil as well as a 40% interest in Famfa’s OPL, ultimately leaving Alakija with only a 20% stake in her business.  In December 2004 Alakija converted the OPL to an Oil Mining Lease (OML), and in January 2005 the Nigerian government announced that they wanted 50% of her 60% stake in the business, meaning she would only be left with a 10% shareholding. Alakija took the fight to the courts.

In May 2012, at the end of a legal battle that took many years, the Nigerian Supreme Court ruled that the government could not take a 50% stake of the mine. A further attempt was made by the Nigerian government to reverse the decision, but the case was dismissed.

Famfa Oil retained its 60% stake in the mine, which is the country’s highest-yielding oil block. The valuation of the mine by the Nigerian government at the time of the court case was that with Famfa Oil owning 60% of the company they would earn about $10 million (R111,3 million) on a daily basis. Famfa Oil pumps approximately 200 000 barrels of oil daily.

NO DEGREE REQUIRED

Speaking at a UN International Youth Day held at the University of Lagos in September, the oil tycoon said she did not need a university degree to get to where she is today, reports Forbes. She was sharing this to show that there are no excuses not to make it big in business. While a university degree has its place in improving people’s lives, Alakija says hard work and perseverance were most crucial to her success.

“So I am 63 and I am not yet done. So what is your excuse? I never went to a University and I am proud to say so because I don’t think I have done too badly,” she said.

SOURCES: www.famfa.com, Chevron.com, Ventures Magazine, Adepetun Caxton-Martins Agbor & Segun, PremierOil.com.

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