Heirs Holdings acquires 45% of OML 17 for $1.1bn
Heirs Holdings (HH), in partnership with affiliated company, Transnational Corporation of Nigeria Plc (Transcorp), has announced its acquisition of acquisition of a 45 per cent participating interest Nigerian oil licence OML 17 and related assets costing $1.1 billion
The acquisition was done through TNOG Oil and Gas Limited, a subsidiary of Heirs Holdings and Transcorp, from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and ENI. In addition, TNOG Oil and Gas Limited will have sole operatorship of the asset.
Acquirer said in a statement that the transaction is 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 statement read.
Heirs Holdings said the investment demonstrates further steps in the execution of its 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 $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”),” the statement read.
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.
Chairman of Heirs Holdings, Tony 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.
The acquisition of such a high-quality asset, with significant potential for further growth, according to him, is a strong statement of the Holdings’ confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that the company has 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.
Speaking further, he said “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.”
Speaking on the investment, the President/GCEO of Transcorp, Owen Omogiafo, said “This deal further demonstrates Transcorp’s integrated energy strategy and our determination to power Africa.”
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.