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Tag: ConocoPhillips

  • Oando pays $1.5b for ConocoPhillips’ assets

    Oando pays $1.5b for ConocoPhillips’ assets

    Oando Energy Resources Incorporated (OER), the exploration and production arm of Oando Plc, yesterday paid $1.5 billion for the acquisition of the divested ConocoPhillips’ upstream’s  oil and gas assets in Nigeria.

    The completion of the landmark transaction, acording to the firm, brings to a close the deal, which has been on the table since 2012, when ConocoPhillips’ announced it decision to pull out of its upstream operations in Nigeria.

    With the conclusion of the  deal, Oando becomes the owner of ConocoPhillips’ 20 per cent non-operating interests in onshore assets, including oil blocks in oil mining leases (OMLs) 60, 61, 62, and 63.

    Its ownership also extends to related infrastructure and facilities in the Joint Venture in which Nigerian Agip Oil Company Limited,  holds 20 per cent and the Nigerian National Petroleum Corporation 60 per cent.

    The related infrastructure and facilities include 40 discovered oil and gas fields, of which 24 are currently producing, 12 production stations, approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, and the Kwale-Okpai 480 Mw combined cycle gas-fired independent power plant.

    Also, ConocoPhillips’ 95 per cent operating interest in OML 131 and 20 per cent non-operating interest in oil prospecting licence (OPL) 214, converted to OML 145 last month, will be fully  transferred to Oando.

    Other companies in the Joint Venture asset (OML 145) include ExxonMobil (20 per cent and operator), Chevron (20 per cent), Svenska (20 per cent), Nigerian Petroleum Development Company (15 per cent) and Sasol (5 per cent).

    Oando also said that through this transaction, OER will indirectly own all of the issued share capital of ConocoPhillips in Nigeria effective January 1, 2012, which translates to the date of the transaction.

    Oando said the total reserves and associated resources in the deal,  including proved, plus probable reserves, amount to about of 211.6 million barrels of oil equivalent (MMboe), adding that the transaction represents a significant opportunity for OER to create scale and significant value for its shareholders.

    It noted that OER’s sales production from the onshore assets, averaged 36,494 barrels of oil equivalent per day (boe/d) in 2013 and 39,266 boe/d in the first half of 2014.

    Oando said: “Upon completion of the transaction, OER will be positioned as one of the leading E&P players in the Nigerian oil & gas sector, as measured by end-2013 proved plus probable reserves of 230.6 MMboe.

    “The transaction was financed with an approximate 50/50 debt-equity ratio and is immediately cash generative and will contribute significantly to the cashflows of the company.

    “This transaction represents a transformational leap forward for our company and is in keeping with our overall strategy to grow our portfolio of Nigerian-based assets by focusing on those opportunities that deliver high quality growth in reserves and production,” said Pade Durotoye, Chief Executive Officer of OER.

    “Our management team is familiar with these assets and possess the managerial experience and technical expertise necessary to unlock their value for our shareholders,” he added.

    The Chairman, OER, Mr. Wale Tinubu, said: “We believe in the significant potential that the Nigerian oil and gas industry holds and are privileged to play a pivotal role in its consolidation, growth and development. We will continue to seek strategic opportunities that provide a platform for enhanced growth and value creation for our stakeholders.”

  • Oando edges ConocoPhillips’ acquisition with $550m deposit

    •Gets assurance on $450m global loan

    Oando Plc, through its upstream oil exploration and production subsidiary, Oando Energy Resources (OER) Inc, has made a total deposit of $550 million to ConocoPhillips (COP), more than one-third of the $1.55 billion deal for the acquisition of COP’s Nigerian business.

    In the latest update on the landmark transaction, Oando indicated that it has also extended the availability period of the $450 million senior secured facility agreement arranged by a group of international banks including Standard Chartered Bank, BNP Paribas and Standard Bank of South Africa Limited to August 31, 2014.

    The facility is a five and a half years lending arrangement which amortises quarterly with an annual interest rate of LIBOR plus 8.5 per cent. Proceeds from the facility are intended to be used to fund a portion of the purchase price for the COP’s acquisition. All terms and conditions under the initial executed binding documentation remain unchanged.

    According to the company, it had increased its deposit with COP by $25 million to increase total deposits to $550 million.

    OER had reached agreement with COP to extend the outside completion date for the acquisition of COP’s Nigerian oil and gas business by Oando till June 30, 2014.

    A regulatory filing submitted to the Nigerian Stock Exchange (NSE) stated that the extension of the outside date for completion was necessary to enable the companies to satisfy all closing conditions including the anticipated consent of the Minister of Petroleum Resources in Nigeria.

    According to the filing, pursuant to an amendment agreement executed on April 30, 2014, OER and COP agreed to extend the outside date for completion of the COP acquisition from April 30, 2014 to June 30, 2014.

    Under the terms, OER also agreed to increase its deposit by $25 million on May 30, 2014, if the consent of the Minister of Petroleum Resources is not received on or before May 23, 2014.

    Oando had technically concluded the momentous acquisition as it pooled the final financial considerations to complete the $1.55 billion agreement with COP in January 2014. The completion of the financial considerations sealed the deal for Oando, although the two parties will still have to wait for the final approval by the Federal Government.

    In December 2012, Oando, through its subsidiary Oando Energy Resources (OER), entered into an agreement with COP to acquire COP’s Nigerian businesses for a total cash consideration of US$1.55 billion. Oando confirmed at the weekend that it has raised the balance of funds and attained financial closure for the deal, pending the approval of the government.

    Oando had made an initial deposit of $450 million to COP. It subsequently undertook many capital raising exercises through a combination of equity and debt including $200 million from a special placement of two billion shares, $100 million through the sale of its subsidiary East Horizon Gas Company and debt from financial institutions totaling $800 million.

    While Oando had duly completed all financial commitments regarding the acquisition, closing of the COP acquisition remains subject to satisfaction of closing conditions, including approval from the Minister of Petroleum Resources. COP was said to have already submitted an application to the Minister of Petroleum Resources to approve the transaction.

    Speaking recently during a visit to the NSE, group managing director, Oando Plc, Mr. Wale Tinubu, confirmed the financial closure and said the group’s acquisition of COP Nigerian assets would dramatically impact on the fortunes of the group going forward.

    According to him, Oando will more than double its pre-tax profit to some N100 billion as the integrated energy group looks to unlock immense potential of COP acquisition.

    He said with the conclusion of the acquisition of COP, Oando’s earnings before interest, taxes, depreciation and amortisation (EBITDA) will rise from the current annual average of N45 billion to N100 billion.

    He said the increase in earnings would also lead to improvement in dividend payout to shareholders going forward.

    He earlier noted that the audacious acquisition is a game changer for Oando as it will immediately position the company as the largest indigenous oil producer in Nigeria.

    “We are immensely pleased to have secured all funding to complete our. We are tremendously excited about the future of our organisation as this acquisition will not only provide significant growth in size and scale; but will substantially strengthen our position in the upstream sector,” Tinubu said.

    Oando through OER currently produces 4,500 barrels of crude oil per day from two producing fields, with this acquisition it will start producing circa 50,000 barrels per day from six producing fields.

  • PENGASSAN, ConocoPhillips on war path over severance pay

    The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has drawn the battle line between it and the management of ConocoPhillips over the oil firms planned divestment from the country.

    The workers want all labour issues, especially payment of severance package and sales bonus, setttled before they will accede to the outright sale of the oil firm’s assets in the country.

    ConocoPhillips, one of the major players in the upstream sector, is planning to divest from the country.

    The workers added that the company should be ready to settle all liabilities to Nigerians working in the firm.

    The workers said they were ready to use all legal means to ensure that ConocoPhillips respects the extant labour laws and other international conventions regarding severance of employees.

    In a statement, its National Public Relations Officer, Comrade Seyi Gambo, said the workers would not hesitate to shut the oil sector if their requests were not addressed.

    According to Gambo, the union is aware that ConocoPhillips would soon approach the Minister of Petroleum Resources and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) to seek approval for the sale of the oil blocks to some oil companies, adding that the process for outright sale of its operations in the country too is expected to be completed before the year runs out.

    The union alleged that all expatriate workers of the oil major have been paid their entitlements and redeployed to other countries where the firm operates while neglecting its indigenous workers.

    The union stated: “The Minister of Petroleum Resources and the Group Managing Director of the NNPC should not grant the approval unless the management of ConocoPhillips engages PENGASSAN on the severance of its members before concluding the sale so as not to plunge the buyers into industrial crisis.

    “We are not saying that ConocoPhillips cannot sell their properties or investments in Nigeria, all we are saying is that the company should engage PENGASSAN so as to discuss the severance package and sales bonus of our members in that company.

    The workers lamented that all the efforts they had made to ensure a peaceful resolution of the matter have been rebuffed.

    “We have made several efforts to ensure that the management of ConocoPhillips come to table for discussion, but they arefused to engage the union. Even the company refused to honour the invitation of the Ministry of Petroleum Resources and the Ministry of Labour and Productivity. ConocoPhillips also bluntly refused to yield to the call of the 13-Man Committee set up by the Federal Government to look into various industrial issues affecting the oil and gas industry,” the workers alleged.

    The union alleged that they have letters to the Presidency, Federal Ministers of Petroleum Resources and its Labour and Productivity counterpart, GMD of NNPC, Director, Department of Petroleum Resources (DPR), the Senate President, Speaker of the House of Representatives and other stakeholders on the intention of the firm to short change its members in the outright sale of its oil blocks in the country.

  • ConocoPhillips continues assets divestment in Africa

    Barely one week the American oil giant, Conoco Phillips, sealed deal with Oando Energy Resources (OER), an affiliate of Oando Plc, to ConocoPhillips to acquire its entire business interests in Nigeria for a total cash consideration of $1.79 billion plus customary adjustments the company has also agreed to sell its Algerian business unit to Indonesian state energy company PT Pertamina for $1.75 billion, plus customary adjustments, as part of its ongoing asset-disposition programme in Africa.

    ConocoPhillips Algeria Limited, according to Dow Jones Newswires, holds interests in three major onshore oil fields that averaged 11,000 barrels of oil equivalent per day through October. ConocoPhillips said the net carrying value of its Algerian assets was roughly $850 million as of October 31, 2012.

    The report said that ConocoPhillips expects to close the transaction by mid-2013 adding that the Houston-based energy company is in the midst of a three-year repositioning aimed at improving its balance sheet and focusing on more profitable, less risky unconventional fields in North America. ConocoPhillips has sold or plans to sell more than $7 billion in assets in 2012, including a $5 billion sale of its stake in Kazakhstan’s Kashagan field in the Caspian Sea announced last month. The company also spun off its refining arm earlier this year to Phillips 66.

    Oando, during the transaction said, in a statement by its spokesman of Oando, Mr Meka Olowola, that the transaction includes the intended purchase of Phillips Oil Company Nigeria Limited, which holds a 20 per cent non-operating interest in Oil Mining Leases (OMLs) 60, 61, 62, and 63 as well as related infrastructure and facilities in the Nigerian Agip Oil Company Limited (NAOC) Joint Venture.

    He also said the other partners are the Nigerian National Petroleum Corporation (NNPC) with a 60 per cent interest and NAOC (20 per cent and operator); and Phillips Brass Limited, which holds a 17 per cent shareholding interest in Brass Liquefied Natural Gas (LNG) Limited, which is developing the Brass LNG project, a Greenfield project to develop a two-train, 10 million ton per year liquefied natural gas facility in Bayelsa State, Nigeria. The other partners in this project are NNPC (49 per cent); Eni (17 per cent) and Total (17 per cent).

    In the offshore business arm of the deal, Oando said it would also acquire ConocoPhillip’s’s 95 percent interest in OML 131 in which Medal Oil owns five per cent; and ConocoPhillip’s 20 per cent non-operating interest in oil prospecting licence (OPL) 214.

    The other partners in OPL 214 are ExxonMobil (20 per cent and operator), Chevron (20 per cent), Svenska (20 per cent), Nigerian Petroleum Development Company (15 per cent) and Sasol (five per cent).

    Pursuant to the proposed acquisition, Oando will purchase all of the issued share capital of ConocoPhillips’ onshore and offshore affiliates in Nigeria. Upon closing, the effective date of the proposed acquisition will be today.

    According to Olowola, in connection with the proposed acquisition, Oando has retained The Petroleum and Renewable Energy Company Limited (Petrenel), OER’s independent reserves evaluator, to prepare a report on the reserves and resources of OMLs 60, 61, 62 and 63, which are onshore and OML 131 and OPL 214, which are offshore assets, proposed to be acquired under the proposed acquisition.

    Oando has got approval from Security and Exchange Commission (SEC) to raise N54.6 billion through right issue, which opened on December 28 and would close on February 6, 2013.