Heirs Holdings, Transcorp Acquires 45% Shell, Total, ENI Stake In OML 17 For $1.1bn

The board of Transnational Corporation of Nigeria (Transcorp), on Friday, said it has in partnership with Heirs Holdings, its parent company and leading African strategic investor, it has unconditionally acquired a 45% participating interest in Nigerian oil mining licence (OML) 17 and related assets

The acquisition was done, according to a statement by Chike Anikwe, Acting Group Company Secretary of Transcorp, which was done through TNOG Oil and Gas Limited (a company related to both parties), from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and ENI.

The deal, with a financing component of $1.1bn provided by a consortium of global and regional banks and investors, in addition, gives TNOG Oil and Gas Limited the sole operatorship of the asset.

Heirs Holdings had Standard Chartered Plc, as Global Coordinator, and advisor, while

United Capital Plc, and a syndicate of lending institutions including Afreximbank, ABSA, Africa Finance Corporation, Union Bank of Nigeria, Hybrid Capital, and global asset management firm Amundi.

“OML 17 has a current production capacity of 27,000 barrels of oil equivalent per day and, according to our estimates, 2P reserves of 1.2bn barrels of oil equivalent, with additional 1.0bn barrels of oil equivalent resources of further exploration potential,” the statement noted.

Already, the Heirs Holdings/Transcorp partnership operates OPL281, under a production sharing contract with the Nigerian National Petroleum Corporation (NNPC), while Heirs Holdings’ subsidiary, Tenoil, operates OPL 2008, under a production sharing contract also with NNPC. Tenoil also owns the Ata Marginal Field, which will commence production in Q2, 2021, with 3,500 barrels of oil per day.

It assured that 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.

Continuing, it said “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 2,000 MW 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 US$300m Afam acquisitions in November 2020 and currently “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.”

Commenting on the latest addition to the oil and gas portfolio, Tony Elumelu, Chairman of both Heirs Holdings and Transcorp Plc, restated the very 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,” Elumelu added, expressing appreciation to the trio of Shell, Total and ENI, for the professionalism of the process.

He expressed gratitude also to the Nigerian government, its Ministry of Petroleum Resources, and the NNPC for the confidence reposed in the team.

On the investment, President/Group Chief Executive of Transcorp, Mrs. Owen Omogiafo, described the deal as a further demonstration of “Transcorp’s integrated energy strategy and our determination to power Africa.”

The deal also involved Schlumberger as a technical partner, as well as the trading arm of Shell as an off-taker.

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