Mohammed Shosanya
26 February 2008
Lagos — Oando Plc has acquired Shell Nigeria Exploration and Production's 49.8% stake in two oil Blocks, namely OML 125 and OML 134.
The two deepwater blocks offshore Nigeria were won by Oando in an international competitive bidding process, the company said in a statement yesterday.
The two stakes owned through Shell Nigeria Exploration and Production Co. Ltd. are in deep water blocks OML-125 and OML-134, the latter formerly known as OPL-211. Agip, a unit of Eni, owns the remaining 50.2% in each block.
OML-125 currently produces 18,000 barrels a day of oil from the Abo field combined with near term production growth and high potential exploration acreage to complement Oando's existing upstream position.
OML-134 although still in exploration phase, has already recorded significant discoveries.
According to the statement, the consideration payable is US$625.7 million in cash which will be settled in two trenches. An immediate payment of 10%, it said, was paid on Friday, 22nd February whilst the balance will be paid on completion.
The consideration and any adjustments will be funded from both internal cash resources and from external financing.
Standard Chartered, Standard Bank, BNP Paribas and Merrill Lynch are providing finances to Oando for this transaction. Standard Chartered Bank acted as financial Advisors to the transaction.
Wale Tinubu, Group Chief Executive, Oando Plc expressed pleasure for Oando to have emerged as the preferred bidder in the competitive international bid.
He explained that the development underscores the company's preparedness and capability to develop a sizeable upstream portfolio."
"We have been fortunate to be presented with the rare opportunity to acquire a balanced upstream portfolio in our home market in line with our stated principle to acquire proven, active and near term properties.
Our ability to marshal substantial resources to win a bid of this magnitude further reinforces our status as sub-Saharan Africa's leading integrated energy group.
We are proud of this development and the positive impact on Indigenous corporate Nigeria's profile in the global oil and gas community."
The sale is subject to approval by the government and waiver of pre-emption rights by Agip, the company further said.
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