OML 17: Elumelu gets Afreximbank’s $250m of $1.1bn TNOG’s 45% acquisition fund
Tony Elumelu’s Trans Niger Oil and Gas Limited (TNOG), a subsidiary of Heirs Holdings Limited, which acquired 45 per cent stake in Oil Mining Lease (OML) 17 operated by Shell, Total E&P Nigeria and Eni, has received an African Export-Import Bank’s (Afreximbank) first tranche of $250 million out of the $1.1 billion it offered for the OML 17 onshore oilfield.
Afreximbank disbursed the money being Reserve Based Lending facility that supported the Trans Niger Oil and Gas Limited’s acquisition of the 45 per cent stake in OML 17.
With this $250 million, Afreximbank was the largest lender, underwriting about a quarter of the financing that enabled TNOG to buy stakes in OML 17 from Shell Petroleum Development Company, Total E&P Nigeria Limited and ENI.
Other participating lenders include Africa Finance Corporation (AFC), Union Bank, Shell, Hybrid Capital and Schlumberger, with TNOG advised by United Capital Plc.
The five-year $1.1 billion facility was signed in December 2020, despite the economic headwinds caused by the COVID-19 pandemic. It was led, as mandated lead arrangers, by Afreximbank, Standard Chartered Bank, and ABSA.
Following this acquisition, TNOG will now operate the OML 17 onshore oilfield on behalf of the Nigeria’s national oil giant, the Nigerian National Petroleum Corporation (NNPC), which owns the remaining 55 per cent working interest.
Benedict Oramah, a professor and president of Afreximbank, said the transaction further underscores Afreximbank’s commitment to ensuring that indigenous African companies are able to play a more dominant role in the operations of specialized oil and gas assets in an industry hitherto dominated by the International Oil Companies (IOCs).
“TNOG as the operator of OML 17 will invest in an accelerated production ramp up, thereby boosting foreign exchange earnings and employing more Africans. This resonates with our mandate. We congratulate Heirs Holdings for keeping the Africa flag flying,” Oramah said.
TNOG is a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc (Transcorp), a leading African conglomerate with interests in banking, insurance, real estate, hospitality and power.
Meanwhile, Elumelu, chairman of Heirs Holdings, said, the transaction is a testament to the opportunity in Nigeria.
“Our acquisition of OML 17 and important related assets, significantly advances Heirs Holdings’ strategic vision of creating Africa’s leading integrated energy company. We are building a business that will ensure that African natural resources drive African power networks and ensure value creation occurs in Africa. I would like to take the opportunity to thank Afreximbank, and President Oramah for their strong support and shared vision of the transaction,” he said.
Afreximbank, a pan-African multilateral financial institution, with total assets and guarantees by end of September 2020 put at $20.28 billion and shareholders’ funds of $3.13 billion, has remained a key financier of the African oil and gas industry through Reserve Based Lending and Pre-Export Finance structures in Nigeria, Egypt, Equatorial Guinea, Ghana, Senegal, Republic of Congo, Angola, and South Sudan.