Folorunsho Alakija Overtakes Oprah Winfrey… Now Richest Black Woman

 In the last three weeks, Mrs Folorunsho Alakija has been in the news headlines for very good reasons – her wealth status.
Alakija, 61, was rated as the 24th most richest person in Forbes Africa’s Richest 40 with a net worth of $600 million but according to a recent report by Ventures Africa, the oil tycoon and fashionista is worth at least $3.3 billion – about $500 million richer than media mogul, Oprah Winfrey, whose wealth was estimated at $2.7 billion in September.
If Ventures Africa’s publication is to be believed, a Nigerian woman, nay, Mrs Folorunsho Alakija, is now the richest black woman in the word.


Forbes or Ventures Africa, whose word are you taking?
Read the full report of Ventures Africa here:

VENTURES AFRICA/Africa’s Secret Millionaires – Move over, Oprah – there is a new richest black woman in the world. And she’s Nigerian.

Meet Folorunsho Alakija, a Nigerian billionaire oil tycoon, Fashion designer and philanthropist who is worth at least $3.3 billion- contrary to a recent Forbes Magazine ranking which pegs her net worth at only $600 million.

Alakija, 61, was born into a wealthy, polygamous Nigerian family. She started out her professional career in the mid 70s as a secretary at the now defunct International Merchant Bank of Nigeria, one of the country’s earliest investment banks. In the early 80s, Alakija quit her job and went on to study Fashion design in England, returning to Nigeria shortly afterwards to start Supreme Stitches, a premium Nigerian fashion label which catered exclusively to upscale clientele.

The business thrived, and Alakija quickly made a tidy fortune selling high-end Nigerian clothing to fashionable wives of military bigwigs and society women.

Oil Prospecting License

In May 1993 Alakija applied for an allocation of an Oil Prospecting License (OPL). The license to explore for oil on a 617,000 acre block – (now referred to as OPL 216) was granted to Alakija’s company, Famfa Limited. The block is located approximately 220 miles South East of Lagos and 70 miles offshore Nigeria in the central Niger Delta.

This was in 1993. Many wealthy Nigerian businessmen and military bigwigs who had been allocated oil blocs by the military administration at the time had no clue as to the technicalities in operating an oil block, so many of them typically acquired OPLs, and then flipped them off to international oil companies for substantial profits.

But Alakija was intelligent. She had no expertise or experience in running an oil field, but she decided not to sell off her license. In September 1996, she entered into a joint venture agreement with Star Deep Water Petroleum Limited (a wholly-owned subsidiary of Texaco) and appointed the company as a technical adviser for the exploration of the license, transferring 40 percent of her 100 percent stake to Star Deep. Subsequently, Star Deep sold off 8 percent of its stake in OPL 216 to Petrobas, a Brazilian company. Folorunsho Alakija and her family owned 60 percent.

Nigerian Government Forcefully Acquires Stake In The Block

Star Deep Petroleum carried on with exploitation of the oil field. In 2000, the first appraisal well was confirmed to have recoverable reserves in excess of 1 billion barrels of oil equivalent. When this was discovered, the Nigerian government, led by Olusegun Obasanjo immediately ordered that a 40 percent interest in OPL 216 be allocated to the Nigerian National Petroleum Corporation (NNPC) under the Back-in-Right Regulation of 2003 which gives the Nigerian government participatory rights in any OPL or OML. You can read more about this back-in-right regulation in detail here.

This would leave Famfa Oil with a 20 percent stake. This was in 2000, and the government did not pay Famfa a dime for the stake. In 2003, Famfa applied for a conversion from an OPL to an OML, and in 2004 the request was granted. OPL 216 became OML 127.
But the Nigerian government was not content with its 40 percent stake in Famfa. In 2005, the government led by General Olusegun Obasanjo forcefully acquired a further 10 percent stake in OML 127.

Folorunsho Alakija immediately went to the courts to challenge the government’s forceful acquisition take a 50% in the license. It was a lengthy court battle which lasted for several years, but in May 2012, the Supreme Court voided the government’s acquisition of a 50 percent stake in OML 127 and subsequently transferred the 50 percent stake back to Famfa Oil. (Read about Famfa’s victory here).

The Nigerian government tried to appeal the Supreme’s court decision, but the case has been dismissed- a victory for Famfa Oil which sees the little-known oil company owning a 60 percent in OML 127, which is one of Nigeria’s most prolific oil blocks.

Valuation Of OML 127

Daily production at OML 127 currently stands at 200,000 barrels per day. When the Nigerian government, through its wholly-owned petroleum company, NNPC, was trying to justify its forceful acquisition of a 50 percent stake in OML 127 at the Supreme court, the Government admitted that if Famfa Oil owned a 60 percent stake in the OML, the company stood to earn $10 million on a daily basis (after taxes and other exploration costs have been settled).  The government’s argument at the Supreme Court can be found through this link, (item number 23).

So how much is a 60 percent stake in OML 127 worth?

Comparator: In July 2012, Royal Dutch Shell agreed to sell its 45 percent stake in OML 30 for $850 million to Heritage Oil and Shoreline Energy.

According to Fool.co.uk, OML 30 currently produces 35,000 barrels of oil per day.

So, if 45 percent of a 35,000 bpd-producing oil bloc is $850 million, 100 percent of the same bloc = $1.88 billion i.e 100/45 x $850 million

If a 100 percent stake in a 35,000 bpd-producing oil bloc is $1.88 billion, by the same logic, a 100 percent stake in 200,000 bpd-producing oil bloc is worth $10.74 billion i.e 200,000 bpd/35,000 bpd X $1.88 billion

Folorunsho Alakija’s 60 percent stake in a $10.74 billion oil well is worth $6.44 billion.

Technically, her 60 percent stake in OML 127 is worth $6.44 billion.

Another comparator: In November 2012, French oil group Total announced that it was selling a 20 percent stake in its Nigerian offshore oil field to China’s Sinopec in a $2.5 billion deal. The block in question, OML 138 is a 180,000 bpd facility.

So, if a 20 percent stake in an 180,000 bpd facility offshore block is worth $2.5 billion, the entire block is worth $12.5 billion i.e 100/20 x $2.5 billion. Since a 180,000 bpd-producing facility is worth $12.5 billion, a 200,000 bpd-producing facility is worth $13.8 billion because 200,000/180,000 x $12.5 billion.

Using the Total-Sinopec deal as the yardstick, we could also value OML 127 at $13.8 billion. In that case, her 60 percent stake would be worth $8.3 billion.

But to be conservative, we prefer to go with the lower valuation of $6.44 billion.

On Debt
Ventures Africa reached out to Famfa Limited to comment, but the company declined to divulge any information regarding any long-term or short-term debt. We have no idea on how much debt (if any, the company has), but even if we take the high side, and subtract 50 percent of the value of her stake for debt, that still gives her 60 percent stake in OML 127 a market value of $3.2 billion, which makes her richer than the $2.7 billion Oprah Winfrey is worth according to Forbes Magazine’s last rankings.

Real Estate: $100 million
Folorunsho Alakija also has a real estate portfolio worth over $100 million.  Earlier this year, Nigerian and British media announced that Alakija acquired a property at One Hyde Park for $102 million. See media coverage here and here

A source at Famfa Oil who asked for anonymity indeed confirmed that Mrs. Alakija actually acquired the property at One Hyde Park.

Private Jet
Alakija owns a Bombardier Global Express 6000 which she bought earlier this year for a reported $46 million.

PHILANTHROPY
Folorunsho Alakija is the founder of the Rose of Sharon foundation, a Christian-based charity which gives out small grants to widows.

PERSONAL
Alakija is married to Modupe Alakija and they have four grown-up sons together.  She also has a grandchild from her first son. Modupe Alakija, her husband is the Chairman of Famfa Oil. Her sons run the company.

Revealed: Nigerian Billionaire, Alakija Owns Five Apartments At The World’s Most Expensive Apartment Block In London

Madam Folorunsho Alakija

Women are breaking boundaries and holding their own anywhere in the world; Folorunsho Alakija is doing same as the Nigerian oil baroness has been revealed to own five apartments in London’s One Hyde Park, the world’s most expensive apartment block.
In its latest issue out at the weekend, American lifestyle magazine, Vanity Fair ran a report in which it listed Alakija as one of the apartment owners in the 6,000 pounds-per-square-feet One Hyde Park.
The report is the outcome of a six-month long investigation by Zurich-based investigative reporter and expert on tax havens, Nicholas Shaxson.
Other apartment owners in the upmarket One Hyde Park include owner of Ukranian football club, Shaktar Donesk, Rinat Akhmetov, Ukraine’s richest man and One Hyde Park’s wealthiest, whose property is valued at $215.9 million. Next to Akhmetov is Nigeria’s Alakija.
According to the magazine, the five apartments owned by Alakija’s Rose of Sharon 4, a company registered in the Isle of Man, were bought at a combined fee of $123 million (N18.4billion).
The publication noted most of the apartment owners in the London property have tried to conceal their identities by using entities based in offshore tax havens to buy their homes, but investigators never stopped fishing them out.
Alakija’s Rose of Sharon 4, for instance, was said to have been set up in 2010 with five company directors from the Isle of Man, and with “two almost identically-sounding entities listed as shareholders: Barclaytrust International Nominees (Isle of Man) Ltd and Barclaytrust (Nominees) Isle of Man Ltd,” according to Sunday Times, which quoted the Vanity Fair report.
Alakija, who Forbes rated ‘World’s richest black woman’ last year, is believed to worth a combined $3.3 billion, according to Ventures Africa, a business magazine.
There is no history of a big inheritance that made Alakija what she has become today, so we’d say she’s self-made. The billionaire’s business interests span oil, printing and fashion.
Alakija is the Executive Vice Chairman of Famfa Oil Limited, which is into oil exploration. She also owns The Rose of Sharon Group which comprises The Rose of Sharon Prints & Promotions Limited and Digital Reality Prints Limited.