Heirs Holdings’ $1.1bn OML-17 Deal Shows Opportunities Abound In Nigeria-Nwanze

ERNEST NZOR in this report writes on economic importance of the bold move by Heirs Holdings’ successful acquisition of a 45 per cent participating interest in Oil Mining Licence17 and what the deal signifies for Nigeria.

Analysts have said that the HEIRS Holdings $1.1 billion Oil Mining License (OML) 17 acquisition deal from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and ENI is a testament that there are opportunities in Nigeria and that the international market still have confidence in the Nigerian economy.
Corroborating this assertion, the chief finance officer, TNOG, a new company set up by HEIRS Holdings for the purpose of acquiring the asset and growing the group’s energy play, Samuel Nwanze, said, in a recent interview on Arise Television, monitored by LEADERSHIP, said there are opportunities in the country.
He said, “For us as an investment group, we love turnaround opportunities. To take things that are not functional as they should be to a level where they can maximize their capabilities. This asset has about 1.2bn barrels of oil equivalent. It also has about additional 1 billion barrel of oil from exploration opportunities and about 2.2TCL of gas. Huge amount of gas that if we’ll develop it, can contribute to economic development as a whole.’’

OLM17 is an interesting asset located in Rivers State.It covers about 1,300sq km. There’s also a gas facility in the asset of about 170m scf and this include a brand-new gas process plant that is expected to be commissioned sometimes this year in Agbada of about 80m scf. Nwanze said the asset itself has the resources that is required to drive the new government gas strategy as it would also address energy gap in the country today.

According to him, because of the growth plan of the company, there will be significant amount of benefits for government on the asset through levies, royalties, taxes etc. ‘‘We also see a huge employment opportunity because we are going to grow what we have to increase economic development in the area. At a time, we are going through difficulties in the history of the world, we see this as an opportunity to make more contribution in social and economic development of the country. We are talking about a huge amount of oil and gas resources that, if well-developed can feed into the development of the economy as a whole. Professional Nigerians, who have been well developed and trained by a number of the International Oil Companies, IOCs, that we are bringing together to work on this asset, will also build the capacity of our younger ones that are coming up and will be introduced into this industry. Also, because of the growth plans that we have, we see significant benefits for the government in terms of royalties, levies, and taxes. We also see huge employment opportunities, because we are going to grow what we currently have there. These will also culminate in increased economic development, and employment, direct and indirect.”

On community development, he said: “Community engagement and relations are extremely important, not just only in the oil and gas business, but in every business. At Heirs Holdings, we have a track record of being able to relate and work with the communities across all our businesses. We have investments in financial services, health care, power, hospitality, and in all of these businesses, we have engaged and interacted with the communities. As part of our engagement in the communities, we’ve been doing quite a lot. Apart from what the businesses themselves do, our foundation, the Tony Elumelu Foundation, is actively involved in capacity building, and entrepreneurial development across the continent. We want to build and grow and build upon the engagement and community relations that the SPDC has been having with the communities. But we also want to enhance that because we are local, we are indeed indigenes. For us, this is not an asset where we come, we operate, and then we go, this is our home, you know, the people in the communities, are our grandfathers and our grandmothers, they are our fathers and our mothers, their uncles, and aunts, our brothers, our sisters, our sons, and our daughters, this is us.’’

It wasn’t an easy journey to get the funding for the deal. Nwanze disclosed that one of the believe at Heirs Holdings is that once you put your mind into something, you can get it done.
He said, ‘‘The deal was raised from the international market, it was largely advised by Chartered Bank and United capital Plc, a local financial services firm. We were able to put together finances from the top financial firms like AFREXIMBANK and Standard Chartered. AFC is also part of the deal and some international organizations with largest asset management company in the world based in Europe. Moody Asset Management also participated in the deal. The Key thing is structuring, if you have a deal and you structured it properly, people see value in it. The $1.1Bln is a testament that the international market still have confidence in the Nigerian economy.


There are opportunities in Nigeria and there are a lot we can do if we go along that track. We have acquired 45% of the deal, the other 55% is still owned by NNPC. NNPC has been wonderful and focus to ensure that we are able to generate value from the asset. We also have partnership with slumbergy, the company is providing a technology to help get the best out of the asset with minimal investment. TNOG which is the company heirs holding used to acquired the asset after going through the scrutiny of the regulator (NNPC) is the operator of the asset. So, we have built capabilities from all these partnership that we have to ensure that we can generate value.’’


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