African strategic investor Heirs Holdings (HH), in partnership with affiliated company Transnational Corporation of Nigeria Plc (Transcorp), announced the unconditional acquisition of a 45% participating interest in Nigerian oil licence OML 17 and related assets.
The acquisition was completed through TNOG Oil and Gas Limited (a related company of Heirs Holdings and Transcorp), from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and ENI. In addition, TNOG Oil and Gas Limited will have sole operatorship of the asset.
According to a joint press release, the transaction is one of the largest oil and gas financings in Africa in more than a decade, with a financing component of $1.1 billion, provided by a consortium of global and regional banks and investors.
“OML 17 has a current production capacity of 27,000 barrels of oil equivalent per day and, according to our estimates, 2P reserves of 1.2 billion barrels of oil equivalent, with an additional 1 billion barrels of oil equivalent resources of further exploration potential,” reads part of the release.
Chairman of Heirs Holdings, Tony Elumelu commented: “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. 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.
“As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.”
Heirs Holdings’ strategy of creating the leading integrated energy business in Africa is executed through a series of strategic portfolio holdings. Transcorp is one of the largest power producers in Nigeria, with 2,000MW of installed capacity, through ownership of Transcorp Power Plant and the recent acquisition of Afam Power Plc and Afam Three Fast Power Limited.
Transcorp closed the $300 million Afam acquisitions in November 2020. The power company supplies electricity to the Republic of Benin, as part of an emphasis on promoting regional integration and delivering robust power supply to catalyse development in Africa.
Speaking further, Elumelu said: “I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us.”
Also commenting on the investment, the President/GCEO of Transcorp, Owen Omogiafo, said: “This deal further demonstrates Transcorp’s integrated energy strategy and our determination to power Africa.”