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“Omera sticks to best practices and safety standards”

  • Published at 09:01 pm October 30th, 2019
omera ceo
Shamsul Haque Ahmed, Chief Executive Officer of Omera Petroleum Limited (OPL) Mehedi Hasan/Dhaka Tribune

In an exclusive interview with Dhaka Tribune's Niaz Mahmud, Omera Petroleum Limited (OPL) Chief Executive Officer Shamsul Haque Ahmed, discusses the potential and problems of LPG sector and the current status of his company. Omera Petroleum  is going to become the country's first company in the LPG sector to go public. It wants to raise Tk238.43 crore for its business expansion through book building method. The company, a subsidiary of MJL Bangladesh Limited, will raise capital for the purpose of purchasing oceangoing ships with 3,800 MT capacity and partial payment of long-term loan

How do you evaluate the country's LPG sector?

Currently, the country's LPG sector is highly competitive. There are as many as 27 players and few more are in the pipeline to make their entry in this industry. At present, annual LPG demand of Bangladesh is around 8.5 lakh tons whereas the present capacity of all the LPG operators is more than 15 lakh tons. On the other hand, the present LPG usage penetration level in household is around 60%. Moreover, there is a huge demand for LPG in hotel, restaurant and cafeteria segment, and due to rapid urbanization, the household segment will increase significantly. Auto gas segment will also have a big contribution to the growth of LPG sector in near future. Altogether, the LPG sector has huge potential in the context of Bangladesh market.

Why has your company decided to go public?

The main reason is to extend OPL’s operation from downstream segment towards midstream segment to gain more competitive edge in the market. This will also benefit end consumers in terms of the price they’re paying now. This will further strengthen OPL’s existing best practices related to corporate governance and overall transparency of its business. This will also enable general people to be a part of this unique value-creation initiative by Omera.

How is corporate good governance in your company?

OPL is a subsidiary of Mobil Jamuna Bangladesh Limited, which owns 62.49% shares of the company. The rest 37.51%  shares are owned by foreign companies, such as BB Energy (A Singapore-based LPG trading company) and FMO (A lending arm of the Dutch Government). 

Corporate governance and culture in Omera have been inherited from its major shareholders from the very beginning. OPL has very active board including two independent directors although it was a private limited company. Apart from this, OPL has very vibrant audit committee, nomination and remuneration committee and executive committee — all headed by independent directors.

What are the challenges facing the LPG sector?

Presence of too many players in the Bangladesh market is causing unhealthy practices such as unreasonable price war, compromise on safety, health and environment-related matters.  Sometimes it becomes difficult to adjust any unusual rise in CP (contract price for LPG) considering the inconvenience at the consumer end. 

The activities of some cross/illegal fillers are a potential threat to consumers' safety. This will also dent the potential pace of growth of LPG industry. Immediate and appropriate measures should be taken by law-enforcement agencies to stop these illegal activities. 

What do you say about allegations of not properly bottling, distribution and marketing?

The LPG Operators Association of Bangladesh (LOAB) is playing a vital role in checking all these untoward activities. We expect that the regulatory bodies of the government will ensure that these malpractices are no more. Immediate measures should be taken to ensure that all the safety measures are taken by all LPG operators.

What stands in way of best practices and safety standards?

OPL tries to ensure best practices and safety standards. OPL’s commitment to best practices and safety standards help to grow consumer confidence. It is important that all operators follow the fundamental standards of SHE (safety, health and environment) in order to boost consumer confidence, and the authorities concerned in this regard should ensure that all operators adhere to all safety standards.

What is the plan of Omera Petroleum Limited?

OPL wants to lead the market in all LPG segments and keep on setting new standards in LPG industry. OPL has already the capacity to cater to one-third of the national demand and it also owns the largest distribution fleet. Besides, OPL also intends to diversify its business in all potential segments. Combining all these efforts, OPL wishes to lead the market, besides demonstrating the highest degree of corporate governance and consistently adopting the best practices in parity with international standards in oil and gas sector.