A consortium led by international oil trading house Vitol is in talks to buy stakes in the Nigerian offshore fields held by Petrobras and its partners valued at $2.5billion according to a report by Reuters.
Vitol is expected to shoulder the largest part of the investment which could see the company shell out an estimated $1billion according to a source. The consortium includes Africa Oil and Delonex Energy which is backed by Warburg Pincus and the International Finance Corp.
The planned sale of Brazil’s Petróleo Brasileiro SA (Petrobras) stakes in two Nigerian deepwater fields, Akpo (16%) and Agbami (13%) entered critical stage in March as investors were instructed to proceed with due diligence and to present the binding proposals.
But the Petrobras has kept its card close to its chest regarding whom it is dealing with. In January, Lukoil, Russia’s second-largest crude producer said it was in talks on potentially acquiring stakes from Brazil’s Petrobras in its two Nigerian fields along with other assets in Iran, Iraq and Mexico as it readies to expand its upstream portfolio and replace its reserves to maintain crude production levels.
Vagit Alekperov, the president of Lukoil told S&P Global Platts, an energy sector independent resource that discussions have just begun, and it is too early to give details or say whether that will happen.
It didn’t seem the talks are progressing according to plans. Meanwhile Nigerian oil companies especially the Nigerian National Petroleum Corporation (NNPC) and its subsidiary Nigerian Petroleum Development Company (NPDC) continues to ignore divestments in lucrative offshore fields.
Analysts say lack of funds may be the key factor behind their seeming disinterest.
“First, does NPDC have the funds to make big ticket investments at this time? Second, how attractive are these divestments?” Rafiq Raji, chief economist at Macroafricaintel told BusinessDay in an earlier comment on the matter.
According to information on its website, Delonex Energy is a sub-Saharan Oil and gas company focused on exploration, development and production. It is currently active in Ethiopia, Kenya and Chad and seeks to expand its business further in East Africa and into West Africa.
Meanwhile Africa Oil Corp. is a Canadian oil and gas company, listed on both the Toronto Stock Exchange and the Nasdaq Stockholm stock exchange located in Frihamnen, Stockholm, Sweden, with assets in Kenya and Ethiopia, and an equity interest in Africa Energy Corp.
Africa Oil holds extensive exploration acreage in the East African Rift Basin system where several new significant oil discoveries have been announced in the Lokichar basin of Kenya in which the Company holds a 25% interest along with operator Tullow Oil plc.
The two deepwater oil exploration blocks are located off the coast of Nigeria that contain the Akpo and Agbami producing fields and are operated by Total SA and Chevron Corp respectively, making the assets valuable to buyers.
Petrobras’ net reserves totals approximately 204 million barrels. Current production there stands at 48,000 barrels per day, and it is expected to reach about 75,000 barrels per day until 2019.
The company on January 3 agreed to pay $2.95 billion to settle a U.S. class action corruption lawsuit, in what was said to be the biggest such payout in the United States by a foreign entity.
Petrobras denied any wrongdoing in the deal, which was one of the largest securities class action settlements in U.S. history. With the settlement, it will pay out more than six times what it has received so far under a Brazilian probe into bribery schemes that involved company executives and government officials and will constrain payment of dividend that has been stalled since 2014.
