Elumelu’s TNOG acquires 45% of OML 17 from Shell, Total, ENI in $1.1bn deal

AFRICA’s leading strategic investor, Heir Holdings in partnership with Transnational Corporation of Nigeria Plc, yesterday announced the “unconditional acquisition” of a 45 per cent participating interest in Oil Mining License (OML) 17 through TNOG Oil and Gas Limited, an affiliate company.

  The acquisition also includes all assets of the previous owners — Shell Petroleum Development Company of Nigeria Ltd (SPDC) (30%), Total E&P Nigeria Ltd (10%) and ENI (5%) — in the lease.

With the development, TNOG will also have sole operatorship of the OML.

 The transaction is considered one of the largest oil and gas deal in the continent in more than a decade, with a financing component of $1.1 billion, provided by a consortium of global and regional banks and investors.

The oil-mining field currently has a production capacity of 27,000 barrels of oil equivalent per day, with 2P reserves of 1.2 billion barrels of oil equivalent, and additional 1 billion barrels of oil equivalent resources of further exploration potential.

According to a statement shared by the company, 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.

The company further states that Heirs Holdings and Transcorp chaired by Tony Elumelu, heritage and approach to business, fundamentally underscores the commitment to inclusive development and shared prosperity with host communities, especially in the Niger Delta region.

 Speaking after the deal, 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,” he added.

 Also speaking on the investment after closing the transaction, president/group CEO of Transcorp, Owen Omogiafo said: “This deal further demonstrates Transcorp’s integrated energy strategy and our determination to power Africa.”

On his part, Managing Director of SPDC and country chairman of Shell Companies in Nigeria, Osagie Okunbor, 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 deal also involves Schlumberger as a technical partner, as well as the trading arm of Shell as an offtaker.