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    Majors Exit Nigerian Onshore Block


Local investor Heirs Holdings raised some $1.1bn from regional banks and investors to fund the acquisitions.

by: Joe Murphy

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Majors Exit Nigerian Onshore Block

Anglo-Dutch Shell, France's Total and Italy's Eni have all sold their interests in the OML 17 onshore block in Nigeria to local investor Heirs Holdings and its affiliate Transnational Corp of Nigeria for a combined $1.1bn, the companies announced.

Through their TNOG Oil and Gas venture, Heirs and Transnational have acquired Shell's 30%, Total's 10% and Eni's 5% stakes in the block, which contains 15 oil and gas fields, six of which are in production. The block's existing output capacity is 27,000 barrels of oil equivalent (boe)/day and it contains 1.2bn boe in proven and probable reserves with a further 1bn boe of exploration potential, according to Heirs.

"At a time of increased pessimism globally and in Nigeria, the huge deal shines a welcome light on the opportunities that are available in Nigeria," Heirs said. "The transaction is one of the largest oil and gas financings in Africa in more than a decade, with a financing component of $1.1bn, provided by a consortium of global and regional banks and investors."

Shell said it had closed the sale of its stake in OMV 17 for $533mn, with $453mn already paid and the rest to be settled over an agreed period. Total has received $150mn and will get a further $30mn in deferred payments, while Eni did not comment on the deal. The remaining 55% interest in OML 17 is held by state-owned NNPC.

Nigeria is Africa's biggest crude producer. But the focus is shifting to gas, with the country estimated to have nearly 200 trillion ft3 (5.4 trillion m3) of proven gas reserves and a further 600 trillion ft3 yet to be proven. Nigeria is one of the world's biggest flarers of gas, but about 22mn metric tons/yr are liquefied and exported. There are plans to capture more gas for power generation as well as to expand exports.