World Oil Group | Terminal Portuaria Peru

ABOUT THIS POST:   We have been following the progress of this project from the beginning in addition to making note of the concerns expressed on the WOGI InvestorsHub Forum.  This information was gleaned from previous successful and failed projects, such as part of the Port of Callao, which was privatized.  All of the processes and contracts are public knowledge.  Additionally, previous licitations/ bids that have failed and/or succeeded are also publicly available through the regional and national port authority and the regional and national government of Chimbote,  Lima,  and Peru.

In June 2016, Nathan Hall and World Oil Group submitted an LOI (Letter of Intent)  to the Port Authority of Chimbote, Region of Ancash. This was for 30 Years renewable. Nathan met with the Port Authority to discuss the possibility of taking over a mid-water port that needed to be upgraded and dredged to a deep water port.

The Office of the Water Authority provided a letter response with options in early August 2016.  (Autoridad Portuaria Regional De Ancash, Gobierno Regional De Ancash). The Port Authority then requested a formal request from World Oil Group in late August 2016, which was received and registered.

In early October 2016, there was an agreement to move forward in the process and a list of considerations and processes were provided. (Acuerdo de Consejo Regional) This includes multiple levels of approval.

a. Local Port GM
b. Port Authority
c. President over Port Authority
d. Regional Governor
e. Regional President
f. The vote of provinces of Ancash to move forward with private control of the port.

NOTE: To get past section C (above) of this agreement, an environmental study by a specialized port study engineer needed to be completed.  This is a cost that could be as low as $50k or upwards of $150k.  As of February 2017, there was no study completed and Nathan was soliciting funds to maintain his personal overhead and day-to-day living expenses.  This was solicited among local stockholders and has been discussed openly among them.

In late October 2016, Nathan was provided a sample of a master plan to assist him in preparing his bid for the Port of Chimbote. “Propuesta Tecnica y Economica”.  This was an outline provided by the Port Authority.

There are various forms of private control of the Port, but the one selected by Nathan to work with was the Asociación de Participación.  This was the easiest form of control to get approved, but only offers 3 years of control.  According to Nathan, this was later adjusted to 15-20 years with the caveat that he performs according to Section C listed above. Funding is Nate’s largest obstacle and he is unable to secure investors due to lack of trust once due diligence has been completed from potential investors.

The actual project must be submitted confirming at least 7 milestones of funding from the dredging, renovation, expansion, businesses supported, overhead, and business expansion, including branding and marketing. This includes an expected ROI (5 years after construction and operations begin) and revenue plan for both the port and the region.  Once that is accepted, the BID is publicly posted on the regional government’s site and government offices of Ancash and Lima, for any party to challenge the regional or federal government. Additionally, OTHER bidders can now challenge the offer with better offers (They all have to go through the same process).It is my understanding the Chinese government and private entities are also interested in the project, and they have VAST resources.

What makes this a gem of a Port is the fact that it is one of 4 ports that fall under a very old law that allows the regional government to make all of the decisions and approvals, though bidders and lawmakers can still challenge during the publication period. All other ports in Peru fall under the NATIONAL port authority, not the regional, making it more difficult and more expensive.

Even if Nathan is able to overcome all of the above hurdles, he still now has to prove the financing within 21 days of actually taking over the port (not construction). These costs are basic overhead and basic renovations to office, electric, computers, etc.  That will then have to be delivered to the working escrow 7 days prior to hand over.

The next 6 tranches of financing can be delivered over a period of 5-7 years, with milestones that must be met to maintain the agreement.  As this equates to approximately 125 million dollars of initial investment, followed on by another 200 million dollars of additional infrastructure and expansion (i.e., micro refineries, storage facilities, and bunkering stations as per Nathan’s original press releases).  The proof of funds, bonding, special bonds, delivery and execution within the provided timetables are very important and the key to the overall final success and approval to move forward.  NOTE: The amount of monies and actual final renovations may change both the amounts invested and the timelines depending on what is finally agreed upon by all parties.

Side Note: The previous president of the region was arrested within the past 5 months for charges of corruption.  This is one of the difficult obstacles working in an emerging third world country.

For potential investors, Nathan would have to have a registered MOU or LOI from the Port Authority.  The MOU would have to have very specific verbiage guaranteeing success up to the point of the public announcement and posting of Nathan’s offer, with the caveat that the bid is now open to challenges.  In essence, any monies invested at this point would be through angel investors and personal investors (friends and family) going on their gut, followed by venture capitalists once the bid is accepted, normally giving these personal investors partial ownership in the project.  This would require some form of collateral.   Because of the sizeable investment and timeframe to meet benchmarks; the project would move to a Capital investment partner, probably offset with raising capital through a bond through institutional investment bankers. This will then leverage the project to approximately 50% to 75% in favor of the investors, leaving Nathan with a whopping 25% min stake in a potential billion dollar business.

As capital preservation is the number one concern in investing in projects of scale.  It is important to have a firm grasp of the projected capital appreciation, taking into account fundamentals, such as potential gains and losses both realized and unrealized. Without a proper risk assessment model presented by Nathan Hall and his company, the prior items listed are moot.

FACTS:

1. Nathan supposedly has an MOU provided by the regional government of Ancash and through the Port Authority of Chimbote.  He does NOT have an MOU with the Peruvian National Government.

2. While Nathan does not have to produce the MOU publically at this particular time,  it  (along with all other documents leading up to the MOU) will be released when the bid is announced publically and posted for other bidders to challenge.  However, as stockholders, you have the right to demand proof of this document as Nathan is announcing it as a precursor to the success of this project and is enticing and soliciting additional funds based on this document.

3. Due to the fact that the WOGI stock still has a stop sign posted on the OTC Market after almost year, would indicate that either the stock is dark or defunct or Nathan does not have the finances to do the proper filings to lift the stop sign.  To the stockholders reading this; you should be very concerned.

4. Nathan hasn’t neglected the WOGI InvestorsHub Forum.  He is still active, posting and reading under his many aliases.

For more information, contact the Port authority of Ancash (Autoridad Portuaria Regional de Ancash) Ave Francisco Bolognesi N° 589, Chimbote, Telefono N° +51 043-467009 Empresa Nacional de Puertos S.A., Terminal Portuario de Chimbote, La Caleta s/n, Chimbote, Ancash Dept., Peru
Phone:
+51 44 323831
Fax:
+51 44 321199
Email:
tpchimbote@enapu.gob
Website:  http://www.enapu.com.pe/web/index