19 January 2021 – With the acquisition of 45% of Oil Mining License (OML) 17 in Nigeria from Shell, Total and ENI, Heirs Holdings, the Pan African investment group, continues to expand its oil and gas portfolio.
Strategic Pan African investment group Heirs Holdings, in partnership with affiliated company Transnational Corporation of Nigeria, Nigeria’s largest publicly listed conglomerate, announced the unconditional acquisition of a 45% participating interest in Nigerian oil licence OML 17 and related assets, through TNOG Oil and Gas (a related company of Heirs Holdings and Transcorp) from the Shell Petroleum Development Company of Nigeria, Total E&P Nigeria and ENI. TNOG Oil and Gas will have sole operatorship of the asset.
With a financing component of USD1-billion, the transaction is one of the largest oil and gas deals in Africa in more than a decade. The deal was made possible through 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.
According to Tony Elumelu, chairman of Heirs Holdings, the investment demonstrates a further important advance in the execution of Heirs Holdings’ integrated energy strategy and the group’s commitment to Africa’s development, through long term investments that create economic prosperity and social wealth. “Heirs Holdings’ heritage and approach to business fundamentally underscores its commitment to inclusive development and shared prosperity with its host communities. Heirs Holdings is fully invested in the development of the Niger Delta region in Nigeria,” says Elumelu.
Heirs Holdings has a series of strategic portfolio holdings. Transcorp is one of the largest power producers in Nigeria, with 2000 MW of installed capacity, through ownership of Transcorp Power Plant and the recent acquisition of Afam Power and Afam Three Fast Power. Transcorp closed the USD300-million Afam acquisitions in November 2020. Transcorp 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.
Transcorp also operates OPL281, under a production sharing contract with the Nigerian National Petroleum Corporation (NNPC). Similarly, Heirs Holdings’ subsidiary, Tenoil is the operator of OPL 2008, under a production sharing contract with NNPC. Tenoil also owns the Ata Marginal Field, which will commence production in Q2, 2021, with 3500 barrels of oil per day.
“We have a clear vision to create 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,” says Elumelo. According to Owen Omogiafo, president/GCEO of Transcorp, the deal further demonstrates Transcorp’s integrated energy strategy and its determination to power Africa.”
Heirs Holdings was advised by Standard Chartered Plc, as Global Coordinator, and United Capital, with a syndicate of lending institutions including Afreximbank, ABSA, Africa Finance Corporation, Union Bank of Nigeria, Hybrid Capital, and global asset management firm Amundi. The deal also involves Schlumberger as a technical partner, as well as the trading arm of Shell as an offtaker.
Heirs Holdings has created one of Africa’s largest, indigenous owned, oil and gas businesses, headquartered in Lagos, Nigeria and is led by a board and management team with significant regional and global experience in the production, exploration, and value creation in the resources sector.