Eni agreed to sell to OANDO. LG, its Nigerian onshore subsidiary being the latest international energy giant to divest onshore assets in the West African Country.
Nigerian unit Agip oil Company Ltd handled the deal and Eni also takes another step to execute its long term strategy to reduce oil exposure affecting natural gas positively following its disposal in June of oil activities in Congo Republic. The Italia group will be operating in Nigeria.
The Nigerian company said that NAOC Ltd acquisition will almost double Oando’s reserve to 996 million barrels of oil equivalent.
Oando said the purchase will help it to “significantly increase production” and “brings to bear the important role indigenous actors will play in the future of the Nigerian upstream sector”
Neither company commented on the sale price, but Investment bank seem to peg the deal at more than $500 million.
As Nigeria onshore sector witnesses the latest evacuation by an international oil major and almost all of them notably ExxonMobil Corp and Shell, amidst rampant oil theft and spill have sales underway, and continues clashes with communities and more focused exploration budgets.
Stakes in offshore assets in Nigeria has been kept by most oil Majors and typically Africa’s largest oil exporter, which due to theft and years of under-investment struggled to be productive in the past several years.
The country’s most important foreign exchange is focusing on oil and investment in the sector is urgently needed but other planned deals have hit legal and regulatory hurdles.
The state oil company NNPC Ltd opposed Exxon’s intended sale to local firm Seplat, while Shell’s asset sales has been complicated by the court.
An oil and gas exploration and production focusing company, NAOC Ltd major interest is basically on four onshore blocks, two power plants and two onshore exploration leases. Said Eni.
Also said, Local and regulatory authorization are subject to the deal and Eni’s unit stake in Shell Production Development Company, joint ventures operated by shell will be 5%.
