By Ade Jacobs
African Export-Import Bank (Afreximbank) has announced the disbursement of $250 million to Trans Niger Oil and Gas Limited, a company promoted by Tony Elumelu, the chairman of the United Bank for Africa, UBA, to acquire 45 per cent in OML 17 onshore oilfield.
365Daily reported recently that TNOG, a subsidiary 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, acquired the oilfield through capital syndication from many banks.
The trans-African bank disclosed in a statement on Thursday that it has effectively become the biggest financier of the oil deal which started in December last year.
The President of the bank, Professor Benedict Oramah, said the bank wanted to ensure that Africans plays a major role in the oil and gas sector, formerly dominated by foreign oil companies, adding that the transaction will create job opportunities for more people in the continent.
Oramah 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.”
“With this US$250-million Reserve Based Lending facility, Afreximbank was the largest lender, underwriting about a quarter of the financing that enabled TNOG to buy stakes in OML 17 from Shell Petroleum Development Company, Total E&P Nigeria Limited and ENI. Other participating lenders include Africa Finance Corporation, Union Bank, Shell, Hybrid Capital and Schlumberger, with TNOG advised by United Capital Plc.”
Elumelu, on his part, said the acquisition had further proven the strategic vision of Heirs Holdings to advance business opportunities in the continent for the benefit of its people.
According to him, “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.”
The bank said it had remained a key financier of the African Oil and Gas industry through Reserve Based Lending and Pre-Export Finance structures in Nigeria, Egypt, Equatorial Guinea, Ghana, Senegal, Republic of Congo, Angola, South Sudan, and other African countries.
The five-year $1.1 billion 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 per cent working interest.
The oil field has a current production capacity of 27,000 barrels of oil equivalent per day and estimated 2P reserves of 1.2 billion barrels of oil equivalent, with an additional estimated 1 billion barrels of oil equivalent resources of further exploration potential.