Loan scam: Lekoil Limited seals payment extension deal to prevent losing oilfield

Weeks after Lekoil Limited was embattled in a loan scam, which threatened its ownership of an oilfield, the company has secured a postponement agreement to keep its shares. Nairametrics had reported that the $184 million loan announced by Lekoil eventually turned out to be a sham.

Lekoil Limited reached a deal to make the payment for the OPL 310 oilfield to Optimum Petroleum Development Company by May 2, 2020. The oil company is expected to pay the sum of $9.6 million to secure its 17.14% stake in OPL 310.

Nairametrics reported that Lekoil Limited secured the $184 million funding from Qatar Investment Authority (QIA) to finance the drilling and all initial development plans on the Ogo field within Oil Prospecting Lease, OPL 310. But with the Qatar firm denial of ever approving such credit, Lekoil was thrown in the dark without the needed fund to cement its ownership of the oilfield.

The company, which operates in Nigeria and other West African countries, announced that the credit facility secured from QIA was facilitated by a consultant firm, Seawave Invest Limited. But QIA representatives contacted Lekoil to distance the Qatar firm from the funds. Also, Seawave Invest Limited’s representative said no such contact was recorded with Lekoil Limited, therefore, deepening the loan scam even further.

New development: Aside from postponing the payment of the $9.6 million, Lekoil was able to secure a delay of the requirement to prove that it could fund 42.86% of drilling costs. The company now has to July 2020 to show proof of investment capacity.

[READ MORE: Lekoil’s stock drops by 73% on London Stock Exchange)

Speaking on the new development, Lekoil’s chief executive, Lekan Akinyanmi, said, “We remain excited about the opportunities of OPL 310 and are focused on securing the necessary funding under the revised schedule,” Akinyanmi said.

He added that “We are grateful for the support and commitment shown by our partner Optimum.”

Impact of the loan scam: The loan controversy has led to the suspension of the company on the London Stock Exchange (LSE). Lekoil Limited’s shares plummeted as the loan scam was announced. Also, the issue has cast doubt on the potential of domestic oil firms like Lekoil Limited to take over from international oil companies like Exxon Mobil Corp and Chevron Corp, which are trying to sell their Nigerian assets to focus on the portfolio in other markets.