Vitol cementing its stance in Nigeria with $1.5 billion assets
INDEPENDENT OIL TRADER, Vitol is cementing its foothold in Nigerian oil and gas industry as it acquires 50 percent stake, in Brazilian state-owned firm Petrobras’ assets in the country. The assets owned by Petrobras include an eight percent stake in block OML 127, which contains the Agbami production field; and a 16 percent stake in block OML 130 comprising the Egina and Akpo fields.
The consortium buying the assets comprises Vitol Investment Partnership II (50 percent), Africa Oil (25 percent) and Delonex Energy (25 percent).
Russell Hardy, chief executive officer of Vitol said “we are pleased and proud to add this significant upstream asset to our infrastructure and downstream Nigerian investments. Petrobras has a strong non-operated portfolio, managed by Chevron and Total, and which represents around 20 percent of Nigerian production. Vitol looks forward to growing and investing in Nigeria.”
The oil trader has varied interest in Nigeria, some of which include a crude oil lifting contract with NNPC, a Joint Venture (50 percent) with NidoGas who has the biggest LPG Offloading Terminal in Nigeria and owns majority in OVH after buying out Oando in products marketing, amongst others.
Petrobras, however was in an oil and gas exploration joint venture (JV) with BTG Pactual E&P and Helios Investment, but BTG Pactual and Helios will continue to hold its 50 percent stake in the JV. Petrobras’ share in the current production of the assets is 21,000 barrels of oil equivalent per day (boe/d).
The oil company is currently drowning in debt, as its debt rose above $100 billion in 2017 and is working to offload $21 billion in assets by the end of the year. In December, Petrobras agreed to sell a stake in a Brazilian oil field to Norway’s Equinor that’s valued at as much as $2.9 billion. The company’s also planning to exit its 4,500 kilometer (2,800-mile) natural-gas pipeline system for as much as $9 billion, close sources have said.
Petrobras also noted that the transaction is part of its $21 billion divestment programme for 2017 and 2018, and earlier this week, an unnamed source told Reuters that the oil company intends to garner an additional $20 billion through asset sales through the end of next year.
On this deal however, the consideration comprises a cash payment of $1.4 billion and a deferred payment of up to $123 million, and the completion of the sale is subject to certain closing conditions, including approvals by relevant Nigerian government bodies.