Chappal Petroleum Development Company, an indigenous oil and gas company, is one of the strongest bidders for the ExxonMobil Nigeria oil and gas assets that are up for sale, The Business Intelligence Africa (TBI Africa) has learnt.
Chappal Petroleum Development Company reportedly was founded by Mr. Austin Avuru, one of Nigeria’s prominent and respected oil and gas executives, when he left Seplat Energy Plc as the Chief Executive Officer.
Chappal Petroleum stands a good chance to clinch the deal in view of the withdrawal of Warburg Pincus-backed Trident Energy which was Seplat Energy Plc’s partner that was expected to bring a substantial part of the estimated $1.5 billion ExxonMobil Nigeria assets.
Besides, it was learnt that the United Kingdom’s Cairn Energy, with about US$908billion market capitalization, has teamed up with Chappal Petroleum to bid for the assets.
With the backing of Cairn Energy, Chappal Petroleum is also said to be chasing several other Nigerian assets, which some of the International Oil Companies (IOCs) in Nigeria want to divest especially on onshore and swamp areas.
The participation of Avuru’s company in bidding for the assets, it was gathered, was the major reason Avuru was asked to step down from the Board of Seplat Energy Plc, when Seplat discovered his (Avuru’s) company was a key contender for the assets. Avuru was a non-executive director on the board of Seplat Energy Plc.
Meanwhile, an industry source stated that other firms are vying for the assets but top of the list and ExxonMobil’s preferred bidders are Seplat Energy Plc and Chappal Petroleum Development Company. ExxonMobil is still processing all the bids, he said, adding that offer is still open but the oil giant will close transaction between now and end of February as the senior partner in the assets ownership, the Nigerian National Petroleum Company Limited (NNPC) had earlier given approval for sale to Seplat but that was before the pull out of Trident Energy from the deal.
However, the competition is getting keener as the conclusion of sale of the assets gets closer. This is despite the much reported defunding of oil and gas projects by financial institutions. Perhaps the appetite for financing acquisition of these assets is because they are already producing and are viewed as cash cows.
“The contest shows that despite talk of the energy transition making it harder to finance oil and gas projects and acquisitions in Africa, there is still an appetite for select Nigerian assets divested by oil majors, and financing remains available,” said a report.
ExxonMobil’s assets up for sale comprise the 40 per cent interests in the Qua Iboe fields of four blocks and pipelines in oil mining leases (OMLs) 67, 68, 70 and 104 located in shallow water. They are more likely to deliver reliable revenues and carry less risk of theft and sabotage than assets located in the onshore swamp areas. OML 70 currently produces about 150,000 barrels per day.
It would be recalled that Seplat Energy Plc was set up in 2010 by Avuru and Ambrose Bryant Orjiako with the purchase of three licences OMLs 4, 38, 41 divested by Shell in 2010. It now controls eight blocks with net production of 51,000 barrels of oil equivalent per day (boe/d) as at 2020.
