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Eland oil & gas raises N29.5b to buy OML 40 in Nigeria

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….Targets 50,000 bop per day in four years

By Joseph BAMIDELE

LAGOS-Scottish firm, Eland Oil and Gas has successfully raised N29.5 billion (118 billion Pounds) to buy a holding in Oil Mining Lease, OML 40 licence in Nigeria after been listed in the Alternative Investment Market, AIM three years after the Company was f

SHELL MD

ounded.

OML 40 covers some 500 square kilometres and is located onshore in the Niger Delta and contains light ‘sweet’ oil. Since 1964, 18 wells have been drilled there, with 15 finding hydrocarbons. One field, Opuama, was formerly in production for over 30 years, from 1975 to 2006.

Eland plans to target production from existing wells at Opuama that will be restarted at an expected initial gross rate of at least 2,500 barrels of oil per day (bopd) in the next six months.

In late 2013, the company also plans to explore two wells, targeting 113 million barrels per day. Within four years, it is hoped total gross production will rise to 50,000bopd, while Eland will also seek to acquire and develop underexploited upstream assets in Nigeria.

“OML is an asset with production and exploration potential and with independently certified gross recoverable 2P Reserves of 71.5 million barrels, 3P Reserves of 117 million barrels in the Opuama and Gbetiokun Fields and Mean Contingent Resources of a further 16.7 million barrels in the Abiala and Ugbo Fields,” an official of the company said.

Expressing his gratitude to the company’s shareholders, Les Blair, CEO of Eland Oil & Gas, said “I am extremely grateful to the shareholders of the Company who have supported us to complete this milestone transaction. The fundraising of £118 million is the largest on an AIM IPO for over three years and highlights the exciting prospects for OML 40 and Nigeria as a whole.”

The stake in OML 40 was previously held by Royal Dutch Shell, Total and Eni. Shell owned 30 per cent stake in the joint venture for OML 40 along with Nigerian National Petroleum Corporation, NNPC with 55 per cent while Total E&P Nigeria held 10 per cent and Agip Oil 5 per cent.

The Federal Government and the Nigerian National Petroleum Corporation, NNPC granted all relevant approvals for the sale including 45 per cent interest to the buyers.

Shell sold 30 per cent interest of OML 40 to Elcrest Exploration and Production Nigeria (EEPN) for $102m.

EEPN is a consortium of Starcrest Nigeria Energy and Eland Oil and Gas.

With the purchase, Eland will own an initial 20.25%, with 24.75% held by its Nigerian joint venture partner. The remaining 55% is held by the Nigerian government.

Commenting on the rationale behind the sale, SPDC Nigeria Country Chairman Mutiu Sunmonu said divestment is part of the company’s strategy to refocus its asset portfolio.

“SPDC is positioned well for investment and growth opportunities in all areas, including domestic gas, which will be delivered with the support of our government, partners and the people of Nigeria” Sunmonu added.

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Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

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In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.

The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.

The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.

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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.

The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.

This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.

These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.

The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.

 

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Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

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By Yemie Adeoye

NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.

The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.

“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”

The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.

“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.

Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.

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Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

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As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.

Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”

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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.

Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.

We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.

“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.

On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.

 

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