OIL ASSET: Elumelu-led Heirs Holdings acquires 45% interest in SPDC, Total, Agip’s OML 17
THE Tony Elumelu-led Heirs Holdings has acquired a 45 per cent participating interest in Oil Mining Licence, OML 17, and related assets, through TNOG Oil and Gas Limited, from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited, and Nigerian Agip Oil Company Limited.
In a statement obtained by The Daily, http://www.thedaily-ng.com, Heirs Holdings, stated: “The transaction as one of the largest oil and gas financings in Africa in more than a decade, with a financing component of $1.1 billion, provided by a consortium of global and regional banks and investors. OML 17 has a current production capacity of 27,000 barrels of oil equivalent per day and, according to our estimates, 2P reserves of 1.2 billion barrels of oil equivalent, with an additional 1 billion barrels of oil equivalent resources of further exploration potential.
“The investment demonstrates a further important advance in the execution of Heirs Holdings’ integrated energy strategy and the Group’s commitment to Africa’s development, through long term investments that create economic prosperity and social wealth. Heirs Holdings’ heritage and approach to business fundamentally underscores its commitment to inclusive development and shared prosperity with its host communities. Heirs Holdings is fully invested in the development of the Niger Delta region.
“Heirs Holdings’ strategy of creating the leading integrated energy business in Africa is executed through a series of strategic portfolio holdings. Transcorp is one of the largest power producers in Nigeria, with 2,000 MW of installed capacity, through ownership of Transcorp Power Plant and the recent acquisition of Afam Power Plc and Afam Three Fast Power Limited. Transcorp closed the US$300 million Afam acquisitions in November 2020.
“Transcorp supplies electricity to the Republic of Benin, as part of an emphasis on promoting regional integration and delivering robust power supply to catalyse development in Africa. Transcorp also operates OPL281, under a production sharing contract with the Nigerian National Petroleum Corporation (NNPC). Similarly, Heirs Holdings’ subsidiary, Tenoil is the operator of OPL 2008, under a production sharing contract with NNPC. Tenoil also owns the Ata Marginal Field, which will commence production in Q2, 2021, with 3,500 barrels of oil per day.”
The highly elated, Chairman of Heirs Holdings, Tony Elumelu, said: “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector, and a tribute to the extremely high-quality management team that we have assembled.
“As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities, and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.
“I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us.”
Also, the President/GCEO of Transcorp, Owen Omogiafo, said: “This deal further demonstrates Transcorp’s integrated energy strategy and our determination to power Africa.”
According to the company, “Heirs Holdings was advised by Standard Chartered Plc, as Global Coordinator, and United Capital Plc, with a syndicate of lending institutions including Afreximbank, ABSA, Africa Finance Corporation, Union Bank of Nigeria, Hybrid Capital, and global asset management firm Amundi. The deal also involves Schlumberger as a technical partner, as well as the trading arm of Shell as an offtaker.
“Heirs Holdings has created one of Africa’s largest, indigenous owned, oil and gas businesses, headquartered in Lagos, Nigeria, and led by a board and management team with significant regional and global experience in production, exploration, and value creation in the resources sector. The HH Group is committed to the highest standards of safety, health, and community relations, together with best practices in governance and accountability.
However, in another statement obtained by The Daily,
http://www.thedaily-ng.com, SPDC, stated: “The Shell Petroleum Development Company of Nigeria Limited (SPDC), has completed the sale of its 30% interest in Oil Mining Lease (OML) 17 in the Eastern Niger Delta, and associated infrastructure, to TNOG Oil and Gas Limited, a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc (Transcorp), for a consideration of $533m. A total of $453m was paid at completion with the balance to be paid over an agreed period.
“Completion follows the receipt of all approvals from the relevant authorities of the Federal Government of Nigeria. SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area.”
It added: “SPDC is committed to transfer OML 17 in an orderly and responsible manner to the new owner, which will help to provide a sustainable long-term plan to unlock its full potential. The sale also enables SPDC to focus on supporting the Federal Government of Nigeria’s national energy agenda in its remaining OMLs through oil and gas production, payment of royalties, taxes, and levies as well as advancing local content and providing social investments.”
Commenting on the development, Osagie Okunbor, Managing Director of SPDC and Country Chairman of Shell Companies in Nigeria, also said: “As with previous divestments, we will facilitate a successful transition to new ownership. Shell has been in Nigeria for over 60 years and remains committed to a long-term presence here. The other SPDC JV partners, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited, have also assigned their interests of 10% and 5% respectively in the lease, ultimately giving TNOG Oil and Gas Limited a 45% interest in OML 17.”
