•Deal to unlock oil, gas assets stranded for over 20 years
Emmanuel Addeh in Abuja
Chappal Energies at the weekend announced the completion of a deal to acquire the entire oil and gas business hitherto operated in Nigeria by the Norwegian state-owned multinational energy company, Equinor.
A statement by the firm noted that with the deal, it is set to unlock one of Nigeria’s oil and gas assets which had been stranded for over two decades.
“Chappal Energies is pleased to announce the closing of the acquisition of Equinor Nigeria Energy Company (ENEC), which holds a 53.85 per cent ownership in oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
“Since production started in 2008, the Agbami field has produced more than 1 billion barrels of oil, creating value for the Nigerian society and the various stakeholders,” the statement from the company stated.
Chappal Energies said it will also assume the operatorship of OML 129, which has several significant prospects and undeveloped discoveries, including Nnwa, Bilah and Sehki.
The Nnwa discovery, it said, is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
On its website, THISDAY checks showed that Chappal in Nigeria is chaired by William Higgins, with Ufoma Immanuel as Managing Director. Directors of the company include Adesola Oyinlola as well as Victor Imevbore.
“This field development opportunity will unlock a world class asset that has been stranded for over 20 years and is poised to bring substantial benefits to the many stakeholders.
“These include shareholders, employees, local communities and the national economy while supporting the fulfilment of the nation’s objectives as articulated in the Nigerian decade of gas objective,” Chappal said.
Equinor and Chappal Energies entered into an agreement on November 29, 2023 with regards to the acquisition for an undisclosed consideration.
Managing Director of Chappal Energies, Immanuel, in his remarks, described the deal as a milestone, saying it aligns with the company’s existing production and development opportunities.
“We are proud to announce this milestone achievement as an indigenous company acquiring a stake in an offshore Production Sharing Contract (PSC) through a competitive process. This acquisition aligns with our objectives of securing existing production alongside development opportunities.
“We extend our heartfelt appreciation to President Bola Ahmed Tinubu, the Honourable Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, the Honourable Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, Mallam Mele Kyari the Group Chief Executive Officer of the NNPCL, our concessionaire and our partners in the PSC.
“We also applaud the efforts of the regulatory authorities who have guided us through the approval process, specifically the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) team led by Gbenga Komolafe. We realise that government and regulatory support play a pivotal role in fostering impactful investments and enabling indigenous companies to thrive in Nigeria’s energy sector.
“This acquisition not only brings immediate production and cashflow benefits but also reinforces our vision of building an upstream company capable of driving transformative change in Africa’s energy sector.
“We remain dedicated to contributing to Nigeria’s economic prosperity and the development of its energy landscape through responsible and efficient operations.”
Besides, it was learnt that Rand Merchant Bank (RMB), a division of First Rand Bank Limited, acted as the sole financial advisor to Chappal Energies on the acquisition.
Chappal Energies said it’s an energy company focusing on investments in deep value and brownfield upstream opportunities within Africa.
According to the company, its aim is to unlock latent value in Nigeria and Africa’s oil and gas resources and revitalise aging assets with solutions that secure longevity, and enhance operational efficiency.
The completion of the deal has effectively led to the cutting of Equinor’s ties with Nigeria, which go back more than three decades to as far as 1992.
Chappal Energies which is registered in Mauritius, had struck several deals in recent years, including the July 2024 acquisition of a minority share in TotalEnergies’ Nigerian onshore joint venture assets for $860 million.
Aside Equinor, oil majors like Eni and Exxon Mobil as well as TotalEnergies have recently had their divestment agreements approved by the authorities, while Shell Plc has had its own rejected by the NUPRC, the upstream regulator.
Last modified: December 9, 2024
