Nigerian Billionaire, Tony Elumelu, has acquired 45% ownership of the Niger Delta oil producing block previously owned by Shell (30%), Total (10%) and Eni (5%).
Already active in Nigeria’s oil and gas sector through various companies in exploration-production services, Mr Elumelu’s acquisition of the OML 17 license block in the Niger Delta located onshore north of Port-Harcourt, amounted to $1.1 billion.
Mr Elumelu was advised by White&Case and supported by a large number of private banks and development institutions, including Afreximbank, ABSA, Africa Finance Corporation, Union Bank of Nigeria, Hybrid Capital and the Amundi Fund in his acquisition of the oil block.
In a tweet commenting on his acquisition of OML17, he stated, “as a native of the Delta, I have always believed that the region deserves better. With TNOG our approach to Afrocapitalism underlines our commitment to inclusive development and shared prosperity with our host communities.”
The deal includes an oil offtake contract with Shell’s trading arm. This could shelter it from the weak price of oil, which is projected to remain under the $60/barrel level for the next few years, according to a January forecast from the US Energy Information Association.
Shell, through its Nigerian subsidiary SPDC, was the operator of the license, which is also 55% owned by the national company NNPC.
The operation was carried out through TNOG Oil & Gas Limited, a subsidiary of the two main groups in the Elumelu’s galaxy, namely the private company Heirs Holding and the Transcorp group (listed in Lagos).
The OML 17 block, which holds oil and gas reserves, has a production capacity of 27,000 barrels/day. Its 2P reserves (proved and probable) amount to 1.2 billion barrels, according to TNOG. It has 15 gas and oil wells, six of which are producing, according to Wood Mackenzie, a research company.
