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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.
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.
