Vi­tol ce­ment­ing its stance in Nige­ria with $1.5 bil­lion as­sets

Business a.m. - - ENERGY, POWER & RENEWABLES -

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.

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