Oando to buy Nigerian assets from ConocoPhillips

(Story updated Dec. 21, adding details from Oando conference call)

Affiliates of Oando PLC agreed to buy Nigerian assets from ConocoPhillips for a total of $1.79 billion plus customary adjustments.

Oando Energy Resources Inc. (OER) of Calgary is focused on oil exploration and production in Nigeria and the Gulf of Guinea.

The transaction involves two offshore properties consisting of a 95% operated interest in Chota field and 20% nonoperated interest in Uge Field.

Onshore, the deal also includes a 20% nonoperated interest in OMLs 60-63 along with infrastructure in the Nigerian Agip Oil Co. Ltd. Joint Venture, a 20% nonoperated interest in the Kwale-Okpai Independent Power Plant, and a 17% nonoperated interest in the Brass LNG project.

Brass LNG is a proposed two-train 10 million tonne/year project in Bayelsa state.

During a Dec. 21 conference call, OER executives said the offshore assets and Brass LNG project account for less than 30% of the total acquisition price.

ConocoPhillips’ 2012 net production in Nigeria averaged 43,000 boe/d through October of which 60% was natural gas.

The transaction is anticipated to close by mid-2013. Sale of the Nigerian business unit is part of ConocoPhillips’ planned divestitures to help improve returns on capital. ConocoPhillips also recently announced plans to sell its Algerian business to Indonesia's PT Pertamina for $1.75 billion (OGJ Online, Dec. 18, 2012).

"What was key to OER was we wanted to be sure that we invested in a large resource base," said Wale Tinubu, chairman OER. He believes the acquisition will position OER as what he calls "a leading indigenous independent exploration and production player in Nigeria."

He believes that if Brass LNG goes ahead, it holds major upside potential for OER.

"Brass LNG is a plus for this acquisition," Tinubu said. "It's not something we would flip overnight," he said in response to questions during the conference call about whether OER intends to sell its stake in Brass LNG soon.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...