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Energy

Afreximbank disburses $250 million to TNOG to acquire 45% stake in oil lease

Afreximbank has announced the disbursement of $250 million support to TNOG to acquire a 45% stake in OML 17.

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The African Export-Import Bank (Afreximbank) has announced the disbursement of $250 million as part of its support for Trans Niger Oil and Gas Ltd (TNOG) to acquire 45 per cent stake in Oil Mining Lease (OML) 17 onshore oilfield.

The fund is part of the $1.1 billion which is required by the oil firm for the acquisition of the 45% stake in the oilfield in which the Nigerian National Petroleum Corporation (NNPC) holds 55% equity in the Lease.

According to a press statement from Afreximbank, the $250 million Reserve Based Lending facility, is the largest amount to be disbursed for this purpose, underwriting about a quarter of the financing that enabled TNOG to acquire stakes in OML 17 from Shell Petroleum Development Company, Total E & P Nigeria Limited and ENI.

The statement noted that other participating lenders in the consortium include African Finance Corporation, Union Bank, Shell, Hybrid Capital and Schlumberger with TNOG advised by United Capital Plc.

Other participating lenders are Africa Finance Corporation, Union Bank, Shell, Hybrid Capital and Schlumberger, with United Capital Plc. advising TNOG.

TNOG is a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc (Transcorp), a leading African conglomerate with interests in banking, insurance, real estate, hospitality and power

Afreximbank in its statement said, “The five-year US$1.1-billion-dollar facility, which was signed in December 2020, despite the economic headwinds caused by the COVID-19 pandemic, was led, as Mandated Lead Arrangers, by Afreximbank, Standard Chartered Bank and ABSA.

“Following this acquisition, TNOG will now operate the OML 17 onshore oilfield on behalf of the Nigerian National Petroleum Corporation, which owns the remaining 55% working interest,’’ the statement added.

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What the President of Afreximbank is saying

Prof. Benedict Oramah, in his statement, said, “This transaction further underscores Afreximbank’s commitment to ensuring that indigenous African companies are able to play a more dominant role in the operations of specialized oil and gas assets in an industry hitherto dominated by the International Oil Companies.

‘’ TNOG as the Operator of OML 17 will invest in an accelerated production ramp up thereby boosting foreign exchange earnings and employing more Africans. This resonates with our mandate. We congratulate Heirs Holdings for keeping the Africa flag flying.

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What the Chairman of Heirs Holdings is saying

The Chairman of Heirs Holdings and Transcorp Group, Tony Elumelu was quoted as saying, ‘’The transaction is a testament to the opportunity in Nigeria. Our acquisition of OML 17 and important related assets, significantly advances Heirs Holdings’ strategic vision of creating Africa’s leading integrated energy company.

‘’We are building a business that will ensure that African natural resources drive African power networks and ensure value creation occurs in Africa. I would like to take the opportunity to thank Afreximbank, and President Oramah for their strong support and shared vision of the transaction.

What you should know

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  • Nairametrics had about 2 weeks ago reported the acquisition of 45% stake in OML 17 from Shell, Total and ENI by Heirs Holding through TNOG Oil and Gas Limited as part of its bid to expand its oil and gas portfolio.
  • TNOG which is a sister company of Heirs Holdings Ltd. and Transnational Corporation of Nigeria Plc will have the sole operatorship of the asset in a transaction that is reported to be one of the largest oil and gas financings in Africa in over a decade.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Business News

Power Minister explains why power outages have risen

The Minister cited a breakdown of some National Integrated Power Plants supplying electricity to the national grid as being behind the recent power outages.

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The Minister of Power, Engr. Sale Mamman explained why power outages have increased in Nigeria citing a breakdown of some National Integrated Power Plants supplying electricity to the national grid.

The Minister disclosed this in a statement on Thursday morning, assuring Nigerians that the FG is working assiduously to restore the National grid to its previous historical levels and exceed that.

READ: Despite $1.6bn investments, Nigeria’s national grid still worrisome

What the Minister is saying

  • I sincerely regret the recent power outages across the Nation and the difficulties it has brought with it.
  • The problem is caused by the breakdown of some National Integrated Power Plants supplying electricity to the national grid. The plants are namely, Sapele, Afam, Olonrunsogo, Omotosho, Ibom, Egbin, Alaoji and Ihovbor. The Jebba Power Plant was shut down for annual maintenance.

The Minister added that seven power plants are currently experiencing gas constraints including Geregu, Sepele, Omotosho, Gbarain, Omuku, Paras and Alaoji while Shiroro hydroelectric power plant has water management issues.

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Business News

BUA Group, French company announce progress in 200,000 bpd refinery project

This is coming about 6 months after both firms signed an agreement for the supply of process technologies and the design of the facility.

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The BUA Group and Axens, a French-based petroleum technology company, have both signed a progress acknowledgement statement for the proposed BUA multi-billion-dollar integrated 200,000 barrels per day refinery in Akwa Ibom State.

This is coming about 6 months after both firms signed an agreement for the supply of process technologies and the design of the facility.

BUA, while making the disclosure in a statement on Wednesday, April 14, 2021, said that the French President, Emmanuel Macron, commended its Chairman, Abdul Samad Rabiu, for his commitment to developing lasting relationships between French and Nigerian businesses.

READ: What the $1.5 billion Port Harcourt refinery deal means to us – Maire Tecnimont

The statement said that this came as the French Minister for Foreign Trade and Economic Attractiveness, Franck Riester, paid a visit to the BUA Group Headquarters in Lagos where he handed over a personal invitation from Macron to Rabiu to attend the Choose France Summit in June in Paris representing business leaders from Nigeria and Africa.

The French minister also witnessed the signing of a progress acknowledgement statement between BUA Group and Axens of France for the proposed refinery project, according to the statement.

The statement also said that during the visit, it was announced that the BUA chairman had been appointed Chairman of the France Nigeria Investment Club.

READ: FG reacts to reports of revoking 32 refinery licenses

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While thanking the minister and Macron for their unwavering support in bringing BUA and French businesses together, Rabiu said BUA had so far initiated partnerships and had developed personal relationships with a few French businesses, including Axens.

He expressed confidence in the quality of expertise and technical know-how of the French companies BUA had partnered with.

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Rabiu pointed out that the BUA refinery would reduce the huge cost of transporting Nigerian crude offshore, refining it and bringing it back into the country when fully operational.

READ: Abdulsamad Rabiu’s stake in BUA Cement has increased by N1.2 trillion in value since listing in 2020

He said that the choice of Akwa Ibom for the refinery was due to the huge availability of raw materials and its proximity to export petroleum products to regional countries.

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The President of Axens, Jean Sentenac, in his statement, said he was pleased that the project was advancing on schedule and expressed delight for the very good cooperation between all the involved parties, reiterating the commitment of Axens in delivering the BUA Refinery Project on time and with the highest standards.

READ: FG to open LPG distribution channels in all local governments

Bottom line

The completion and take-off of the refinery owned by the BUA Group would come as a huge boost for the Federal Government’s effort to stop the importation of refined petroleum products, ensuring that the country becomes a net exporter of these products.

This will also help to conserve the scarce foreign exchange as the completion and take-off of the Dangote refinery and other similar refinery projects will help ensure self-sufficiency in the country.

The BUA Group, just a few days ago, was listed as one of the companies with an active refinery license from the Department of Petroleum Resources (DPR).

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