The Nigerian unit of Africa-focused oil and gas company Afren has agreed to buy a stake in oil fields in Nigeria from Royal Dutch Shell, Total and Eni.
First Hydrocarbon Nigeria (FHN), in which Afren has a 45 per cent stake, has agreed to buy a 45 per cent stake in OML 26 in the Delta State for $187.5 million (approximately €135 million). The price includes the cost of the acquisition and FHN's share of planned development.
The remaining 55 per cent stake will be held by the state-run Nigerian National Petroleum Corporation.
OML 26 contains two producing fields and three undeveloped assets. According to Afren, the area contains recoverable reserves and contingent resources of 184 million barrels of oil and could contain another 615 million barrels of oil equivalent resources.
OML 26 currently produces 5,000 barrels of oil a day but FHN plans to raise production to 40,000 barrels a day over four years. Work will includethe drilling of 21 production wells and existing well locations being expanded to accommodate multi-well clusters.
Commenting on the agreement, Osman Shahenshah, chief executive of Afren, commented:“Afren’s support of First Hydrocarbon Nigeria’s acquisition of a 45 % stake in OML 26 marks an important milestone in our long-term commitment to the indigenous oil and gas sector in Nigeria.”
He continued: “This acquisition is materially accretive to Afren’s NAV, and is a strong endorsement to Afren’s long term strategy, of working with indigenous companies to reactivate fallow assets held by the major international oil companies in Nigeria, and further builds on our unique position in sub Saharan Africa’s largest oil and gas province.”
Dr Oladele Fajemirokun, director of FHN, commented:“Together with our partner, we will optimally develop the fallow fields within OML 26, while seeking to acquire and develop further discovered but undeveloped, under producing and shut-in fields, thereby significantly adding to Nigeria’s indigenous production base.”
FHN was established in June 2009 and fulfils the Nigerian government’s criteria for indigenous operators.
Headquartered in London, Afren is an African focused independent oil and gas exploration and production company with a portfolio of 27 assets across nine countries. The company is currently producing from its assets offshore Nigeria and Côte d’Ivoire, with its Ebok appraisal and development project due onstream in 2010 from Nigeria. Afren has exploration interests in Ghana, Nigeria, Côte d’Ivoire, Congo Brazzaville, the Joint Development Zone of Nigeria (São Tomé & Príncipe), Kenya, Ethiopia, Madagascar and Seychelles.
