| Wed 11 Oct 2006, 12:29 | | Lonrho Africa - Lonrho Africa Acquires 63% of Luba |
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LAF
LOLAF
Lonrho Africa - Lonrho Africa Acquires 63% of Luba Freeport in Equatorial Guinea
Lonrho Africa Plc
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF; ISIN number: GB0002568813)
("Lonrho Africa" or "the Company")
LONRHO AFRICA ACQUIRES 63% OF LUBA FREEPORT IN EQUATORIAL GUINEA
Lonrho Africa announces that it has acquired 63% of the issued share capital of
Luba Freeport Limited ("Luba Freeport") located in Equatorial Guinea ("EG") for
a cash consideration of US$2 million. The balance of the share capital will be
held by the EG Government. As part of the acquisition, Lonrho Africa has also
agreed to acquire secured debt of approximately US$11.3 million from Amerada
Hess, a major client of Luba Freeport. Lonrho Africa will assume control of the
Luba Freeport Board and David Lenigas will become Chairman.
In recent years, Luba Freeport has established a reputation within the West
African region as an efficient and cost effective Freeport. The Port acts as a
logistics centre for the burgeoning oil and gas industries in the Gulf of Guinea
and services major oil companies in the region. As part of the transaction,
Lonrho Africa has agreed with the EG Government to maintain the overall
development programme for the Port facilities.
Its major contracted clients include: Amerada Hess, Mobil Equatorial Guinea,
Baker Hughes, Marathon, LOTEG, Schlumberger, Nalco, SBM, Chevron Texaco, Devon
Energy, Petronas, Noble Energy and MI Equatorial Guinea.
Luba Freeport, which provides a sheltered deep water environment, was awarded a
25-year concession by the EG Government with two 5-year extension options. In
2003, the EG Prime Minister signed a concession confirming the status of the
Port as a Tax Free Zone in respect to custom duties on material imported into
the zone and in transit for countries outside of Equatorial Guinea. This Tax
Free status and its central geographical location make Luba Freeport a unique
choice for a West African regional hub.
In a letter sent to Lonrho Africa, the EG Prime Minister stated that Luba
Freeport was of vital importance and gave an assurance of the EG Government"s on
going support to Lonrho Africa and the development of the Luba Freeport.
David Lenigas, Lonrho Africa"s Chairman and Chief Executive, commented:
"Luba Freeport is being established as a `One Stop Shop" for oil logistics in
one of the fastest growing oil producing areas in the world. As development of
the oil industry continues throughout the Gulf of Guinea and West Africa, more
and more companies will be on the lookout for logistical support for their oil
industry requirements.
"Luba Freeport will be providing a substantial boost to the local economies
whilst at the same time offering a modern world-class facility for its clients.
This investment in the Luba Freeport development project is an exciting
opportunity for Lonrho Africa and is in line with the Company"s strategy of re-
establishing itself as a major investor on the African Continent."
LUBA FREEPORT
Phase 1 Development
In July 1999, the EG Government awarded a 25-year concession agreement,
including 50 hectares of land for the development of a Freeport and oil services
logistics base.
In January 2002, a contract was signed with Triton/Amerada Hess for the
development of a 50,000 square metre facility which included warehouses and
offices, a covered pipe inspection area, a storage area for well heads, a
chemical storage area and an API specification pipe yard.
The Triton/Amerada Hess facility was completed in March 2003 following the
construction of a 110 metre waterfront quay.
Phase 2 Development
On 21 June 2003, the EG Government awarded a new 25-year concession to Luba
Freeport Limited, a Jersey registered private company.
Bulking facilities for MI Equatorial Guinea were completed in October 2004.
This enabled the supply of brine, barite, bentonite, oil based mud and chemicals
across the quay.
Construction of the Schlumberger bulking facility was completed in January 2005.
This allowed for the supply of drilling cement across the quay.
Phase 1 of the LOTEG tank farm was completed in February 2005. The present
capacity of the tank farm provides for the storage of 20,000 metric tonnes of
fuel and 1,000 metric tonnes of oil.
A contract was signed with Baker Hughes in early 2006 for a 10,000 square metre
facility including office block, warehouse, tool shop and bulk storage facility.
This facility will supply bulk chemicals and drilling tools for the offshore oil
drilling industry.
A long-term contract has been signed with Mobil Equatorial Guinea for the
construction of a 60,000 square metre lay down area which will include a 2,500
square metre warehouse and office facility, a 2,000 square metre marine hose
storage shed, pipe inspection shed and wash bay.
A 70 metre quay extension is planned for 2006 with an additional 110 metres
planned for 2007.
Future Development
Longer term plans include the development of an additional 350 metres of quay
and the installation of a regional waste management facility for the storage and
treatment of offshore drill cuttings, whilst continuing to attract new long and
short term clients to Luba Freeport.
For more information on Luba Freeport please visit www.lubafreeport.com.
11 October 2006
South African sponsor to Lonrho Africa Plc
Java Capital (Proprietary) Limited
Date: 11/10/2006 12:29:07 PM Produced by the JSE SENS Department
