Elumelu breaks into Nigeria’s oil bloc holding

As TNOG offload Shell, Total, Agip, of 45% combined interests

Upwards mobile investment banker and founder of Total Nigeria Oil and Gas Limited (TNOG), Mr. Tony Elumelu may have gradually embarked on ‘equation balancing’, as he increases his stakes in the upstream sector, following his recent acquisition of 45percent combined interests in OML 17, jointly operated by Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited.

While Shell ceded 30% interest in the deal, Total E & P Nigeria Limited and Nigerian Agip Oil Company Limited, relinquished 10 and five percent, respectively, in their prior holding in OML 17, giving TNOG a lump 45% equity holding.

Although SPDC in a statement yesterday said the transaction wrapped up on a total of $533m, neither Total E&P Nigeria Limited nor Nigerian Agip Oil Company Limited has yet announced the cost of the equity deal.  SPDC also said that the deal followed the due process, with receipt of all approvals from relevant authorities of the Federal Government of Nigeria, fully completed.

The oil giant further informed that that TNOG Oil and Gas is a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc; noting that the latter has paid two third of the deal sum, with a pledged to liquidate the balance over a period of time. The deal according to the statement is also limited to OML 17 situate at the Eastern Niger Delta and associated infrastructure.

“A total of $453m was paid at completion with the balance to be paid over an agreed period. SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area,” the SPDC said.

Although the maverick entrepreneur did not disclose the cost of the lump deal, insider source put the bulk transaction at $1.1bn. OML 17 has a current production capacity of 27,000 barrels of oil equivalent per day and, 2P reserves of 1.2 billion barrels of oil equivalent, with an additional 1 billion barrels of oil equivalent resources of further exploration potential.

Elumelu who doubles as the Chairman of Heirs Holdings said, “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.

Whereas, Heirs Holdings is a leading pan-African Investment Company, its investment portfolio spans the power, oil and gas, financial services, hospitality, real estate, and healthcare sectors, operating in twenty-three countries worldwide.