By Collins Nweze
THE $1.1 billion Oil Mining Licence (OML) 17 deal sealed by Heirs Holdings will boost government’s levies, royalties and tax collections, Chief Financial Officer, TNOG Oil & Gas Limited, Sam Nwanze has said.
TNOG Oil & Gas Limited was set up by Heirs Holdings for the purpose of acquiring the OML 17 from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and ENI.
Speaking on the landmark deal, Nwanze said aside tax benefits, there would be huge employment opportunities including direct and indirect employment for Nigerians. The acquisition, he added would enable Heirs Holdings has been looking at ways to contribute to energy discussion and drive economic development and meet Africa’s energy need.
Nwanze said the deal was raised from the international market, it was largely advised by Standard Chartered Bank and United Capital Plc, a local financial services firm. “We were able to put together finances from the top financial arms like Afreximbank and Standard Chartered.
African Finance Corporation (AFC) is also part of the deal and some international organisations with largest asset management company in the world based in Europe. Moody Asset Management also participated in the deal,” he said.
He said that proper structuring of the deal also helped in raising the fund. He said the deal is a testament that the international market still has confidence in the Nigerian economy.
Read Also: Retirees urge Fed Govt to clear arrears
Nwanze said: ‘‘we also see a huge employment opportunity because we are going to grow what we have to increase economic development in the area. At a time, we are going through difficulties in the history of the world; we see this as an opportunity to make more contribution in social and economic development of the country. We are talking about a huge amount of oil and gas resources that, if well-developed can feed into the development of the economy as a whole.”
According to the TNOG Oil & Gas Limited CFO, professional Nigerians, who have been well developed and trained by a number of the International Oil Companies (IOCs) working on the asset, will also build the capacity of younger ones that would be introduced into this industry.
On community development, he said Heirs Holdings has a track record of relating and working with the communities across all our businesses.
“We have investments in financial services, health care, power, hospitality, and in all of these businesses, we have engaged and interacted with the communities. As part of our engagement in the communities, we’ve been doing quite a lot. Apart from what the businesses themselves do, our Foundation, the Tony Elumelu Foundation, is actively involved in capacity building, and entrepreneurial development across the continent,” he said.
Continuing, the CFO said the plan was to build and grow the engagement and community relations that the SPDC has been having with the communities.
“But we also want to enhance that because we are local, we are indeed indigenes. For us, this is not an asset where we come, we operate, and then we go, this is our home, you know, the people in the communities, are our grandfathers and our grandmothers, they are our fathers and our mothers, their uncles, and aunts, our brothers, our sisters, our sons, and our daughters, this is us,’’ he stated.
There are opportunities in Nigeria and there are a lot we can do if we go along that track. We have acquired 45 per cent of the deal, the other 55 per cent is still owned by Nigeria National Petroleum Corporation. The NNPC has been wonderful and focus to ensure that we are able to generate value from the asset.
He said, “For us as an investment group, we love turnaround opportunities. To take things that are not functional as they should be to a level where they can maximise their capabilities. This asset has about 1.2 billion barrels of oil equivalent. It also has about additional 1 billion barrel of oil from exploration opportunities and about 2.2TCL of gas. Huge amount of gas that if we will develop it, can contribute to economic development as a whole.’’
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$300 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 the second quarter , 2021, with 3,500 barrels of oil per day.
Heirs Holdings was advised by Standard Chartered Plc, as Global Coordinator, and United Capital Plc, 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 led by a board and management team with significant regional and global experience in production, exploration, and value creation in the resources sector. The HH Group is committed to the highest standards of safety, health, and community relations, together with best practice in governance and accountability
Leave a Reply