Why Heirs Holding, Transcorp acquire 45% of Shell oil mining licence 17 for $1.1 bln ~Elumelu
By Oludare Mayowa
The chief promoters of Heirs Holdings and Transcorp Plc, Tony Elumelu said the decision to acquire the Oil Mining Licence (OML) 17 from Shell and others was based on the determinations of his organisations “to deliver value across the energy value chain” in the country.
In a statement on Friday, Elumelu said; “We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.”
“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,” Elumelu said in the statement issued by his office on Friday.
“This deal further demonstrates Transcorp’s integrated energy strategy and our determination to power Africa.”
Heirs Holdings, majorly owned by Elumelu in partnership with Transcorp said they have acquired a 45 percent stake in Nigerian oil licence OML 17 and related assets.
RELATED STORY: Tony Elumelu Heir Holding acquires Shell OML 17
The firms said the acquisition was effected through TNOG Oil and Gas Limited, jointly owned by Heirs Holdings and Transcorp.
The OML 17 belong to Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and ENI.
According to the statement, TNOG Oil and Gas Limited will have sole operatorship of the asset.
“The transaction is one of the largest oil and gas financings in Africa in more than a decade, with a financing component of US$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, the statement stated.
It said 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 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.
Commenting on the deal, Elumelu stated: “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.
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 practice in governance and accountability.