How Perseverance And Optimism Got Heirs Holdings Limited, Founded By Tony Elumelu, the Multi-million dollars OML 17 Oil Block, As Afrexim Bank Disburses $250 million Financing For the $1.1 billion Deal

 By Stephen Ubanna

Between June and mid-December, 2020, Tony Elumelu, Chairman, hiers Holdings Limitd and Transnational Corporation, popular, Transcorp,   and who incidentally is also the  Chairman of United Bank for African, UBA,plc, nplc, hasd been concerned on how to raise the $1.1 billion  for Trans Niger  Oil and Gas Limited,  TNOG, described in energy circles  as Nigerian’s own Shell, which a British Oil giant to acquire the 45% OML 17.

Hiers Holdings limited , using TNOG, had been monitoring the activities at the OML 17, for eight years  when information  filtered out that Shell Petroleum Development Company, the sole operator of the onshore oil field on behalf of the Nigerian National Petroleum corporation , NNPC, which owns 55%, stakes in in the oil field I the oil field, making the majority shareholder, Total, a French speaking oil giant  and ENI, an Italian Oil giant, which own 10% and 5% respective in the  oil field  have concluded to plans to divest their 45 statkes to any indigenous oil and gas company.

 Elumelu, who did not want to miss the  opportunity was said to opened up discussions  with the three prospecting International Companies which have stake at OML 17 to show its interest to buy their  shares since they  are no are no longer interested in continuing their  oil drilling operations in the oil field.   Elumelu, who could  not hide his feelings after the Completions of the transactions last December with Shell Petroleum Development Company, SPDC,  known in energy circles  United Kingdom , UK, as Royal Dutch and the two European oil giants, Total and ENI, had said  that the group  ‘’encountered  enormous  challenges in the process of acquiring  the 45%  divested stakes in OML17.

Giving an insider information , he said , ‘’it took eight  years of  resilience, endurance, optimism and persistence to finalise the $1.1 billion deal’’.  As a prelude to taking over  the SPDC 30% stake   at the OML 17, which was put out   for sale for  $533 million. As at Friday, January 15, 2021,  British oil giant was said to have completed  the sale  of the its 30% state in the onshore oilfield  in the Easten Niger Delta   and associated infrastructure to Elumelu owned Oil and Gas Company, TNOG, a related Company of Heirs Holdings Limited and Transcorp  for a consideration of  $533 million. Elumelu may have shown that that the African Conglomerate is financial   prepared for the  multi-million dollar deal as the Company  was said to have paid $453 million on Completion of the transactions  with the balance  to paid  over an agreed period.

The Value News learnt that the payment  of the amount to SPDC, follows  the receipts  of all approvals  from the ministry of Petroleum Resources , NNPC and all other relevant government Authorities. For now, the British oil  firm, had said that ‘’it will focus its attention    on supporting the government’s national 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 in the country.  The Royal Dutch oil giant was said to have given its word to facilitate a successful transiton of OML 17, to Heirs Holdings , the new operators.    

Total, another foreign oil giant   which had stake on OML 17, , had also completed the transactions on the sale of its  10 % participating interests  to TNOG, related Heirs Holdings and Transnational Corporation plc, at  $180 million, but the Company  was said to have  about $150 million, while  the balance $30 million,  was agreed by the parties  to be paid  under  a preferred  payment scheme.  The OML 17, oil bloc, according to informed sources   was said to have  produced  about  500 b/d in 2020 in total group share.

Given the involvement of Elumlu, a known Nigeian investor , may have have informed  why a group of global and regional banks  and other investorshad  provided  the 41.1 billion for the payment of the OML 17 . Standard Chartered Bank   was  said to have acted  as the global Coordinator of the funds for  Financing the deal  while United Capital  served as the Advisor.  The  Lenders  to the $1.1 billion oil block deal  with the  three prospecting oil Companies   included, African Import and Export Bank, Afreximbank,  ABSA, Africa Finance Corporation, AFC, Union Bank of Nigeria and  global asset Management  firm, Amundi.

Dramah: President, Afrexim Bank

Only recently  Afrexim  was said  to have   disbursed $250 million of the $1.1 billion  required   to finance the acquisition of the OML 17 by  TNOG   of a 45% stake in OML 17.   Informed sources told The Magazine  that the  Afreximbank  $250 million  `reserve  based  lending facility had made the bank  the largest lender towards the $1.1 billion OML 17 oil block  acquisition by Heirs Holdings Limited through its subsidiary, TNOG, .

 The underwriting  of  about a quarter  of the financing  of the OML 17 according to the source, had made it possible  for TNOG   to buy the 45 % stakes  in OML 17 from Shell, Total and ENI with ease. In giving out the $250 million facility to Heirs Holdings , the bank had said  in a Statement on Thursday, January 28, 201,  that’’ the  other participating lenders to the $1.1 billion OML 17 oil block deal between the three  prospecting  oil Companies  oerating in the Niger Delta  region and Heirs Holdings included AFC, Union Bank, Shell , Hybrid Capital and  Schlumberger, with TNOG, advised by United Capital limited’’.

Recall that  the five year $1,1 billion  facility  was signed in December , 2020,  by the financing financial institutions , despite  the economic headwinds  of  the Wuhan town in the Asian country of China emerged coronavirus, popular COVID  19.   Benedict Dramah, President of Afrexim bank had   said that  the $250 million facility to Heirs Holdings, underscores  the bank’s Commitment ‘’ to ensuring  that indigenous  African Companies are able to play a dominant role in the operations  of specialised oil and gas assets in the African Continent originally dominated by international  oil companies’’.

Going by the deal,  the Elumelu owned oil and Gas Company , TNOG,  which has 45% stake in the OML 17  will now operate   the onshore oilfield , which was previously operated by SPDC,  on behalf of NNPC, which has  not divested its 55% working interest on the  oil block.

 Until the three international oil prospecting Companies agreed to divest  their  45%  stakes in OML 17,  the oil field  has a production capacity  of 27b/d and an estimated reserves of 1.2 billion barrels  of oil equivalent.Vintage Elumelu.   

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