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SEPLAT Sets Indicative Price Range For IPO

Seplat Petroleum Development Company has set the indicative price range for its shares in its initial public offer (IPO) in what will be a first for any Nigerian company according to Reuters. It will be listed dually on the main market of the London Stock Exchange (LSE) and also on the Nigerian Stock Exchange (NSE).

The indicative price range for its initial public offer has been set at 195 pence to 255 pence per ordinary share for shares to be traded on the LSE's main market and NGN 535 to NGN 700 per ordinary share for shares to be listed on the official trading list of the NSE.

The offer comprises a base offering and an over-allotment option. The base offer will seek to raise gross proceeds of around $500 million, equivalent to 300.9 million pounds and NGN 82.5 billion.

The over-allotment option will represent 15 per cent of the final amount allocated to the international offering in the base offer.

Based on the mid-point of the price range, SEPLAT's implied market capitalisation at admission would be about £1.201 billion.

Seplat had said that it intends to use the funds to support its long-term aim to become a leading exploration and production company in Africa. Among the uses it has for the funds are:  

a) increasing production, reserves and cash flow from its OMLs 4, 38 and 41. It says it will bring at least one new field into production each year in order to replace and add reserves year-on-year;  

b) pursue a focused acquisition and farm-in strategy;  

c) commercialise its gas production (up till now the company has used gas produced solely for satisfying its domestic gas obligations but there are now plans to commercialise and market the gas and two off take agreements have already been signed with Azura Power and Southfield Petroleum, at a minimum unit price of US$3.00/Mscf); and  

d) a dividend policy under which a core ordinary dividend, paid annually, can be increased progressively under conservative long-term oil price assumptions and through the economic cycle.  

House Issues Final Invitation to Diezani Over Oil Swap Deals Investigation

The Joint Committee of the House of Representatives that are investigations the allegations of collusion between the Nigerian National Petroleum Corporation (NNPC) and Swiss oil traders has issued a final invitation to appear to the Minister of Petroleum, Diezani Alison-Madueke.  

The Joint Committee is made up of three committees of the House and they are the Petroleum Upstream, Petroleum Donwstream and Justice Commitees. They have been carrying out an investigation into the allegations made by Swiss based Non Governmental Organisation (NGO), Bernes Declaration (BD), which accused NNPC of colluding with Swiss oil traders to deprive Nigeria of billions of dollars in revenue in shady crude oil swap deals.

The crude oil swap deals have been widely criticized. In the deals, Nigeria sells crude oil to the traders who in exchange deliver petroleum products back. However, as the Executive Secretary of the Nigerian Extractive Industry Transparency Initiative (NEITI), Zainab Ahmed, pointed out, whilst giving evidence to the House, the deals are not economical for the country.  

In her evidence to the House Committee, Mrs Ahmed said that there is no cost efficiency in the arrangements that NNPC has with these offshore processing organisations. She said that the total cost of offshore processing compared with the reported price of PMS, DPK, AGO, and other oil products paid to NNPC was not economically efficient. This arrangement, she said, results in the under delivery of petroleum products to the tune of $866 million by companies involved in the swap.

NNPC has already appeared before the House. The Joint Committees say that they have not yet heard from the Minister following their invitation to her. A notice to appear, they say, will be sent and they say this will be the final notice.

The chair of the Joint Committee, Hon. Muraina Ajibola said: "I have not heard anything from her. We will give her a date to appear before us and that will be the last."

Two Brits Arrested Over Oil Theft Plot

Two British nationals have been arrested along with 12 Nigerians after the Joint Task Force (JTF) said they had uncovered a plot to steal oil from a pipeline. The JTF alleges that the Britons had tried to bribe a senior commander to turn a blind eye on their theft operations.

JTF commander General Emmanuel Atewe said the two Britons were arrested in connection with some Nigerians that they had hired to tap into a Shell Pipeline. He said the Nigerians were technicians that were hired to assist the Britons with their task of siphoning crude oil onto waiting barges. The Britons, he said, brought along $120,000, which was to be used in bribing officers and soldiers along the Chanomi Creek.

A spokesman for the British High Commission confirmed that two British nationals had been arrested.

RA/FoEN Reports Crude Oil Discharge from Agip Pipelines

Environmental action group, Environmental Rights Action/Friends of Earth Nigeria (ERA/FoEN) has reported the discharge of crude oil from Agip's Ikarama oil field in Bayelsa State. They say that the discharge is uncontrolled and poses a great threat to the environment if the situation is not brought under control. According to group the discharge is due to sabotage on two pipelines by oil thieves.

According to ERA/FoEN, community members on a fishing expedition were the first to observe the spill. They have called on Agip to embark on a prompt clean up of the site and to ensure the site remains secure following the clean up.  

Meanwhile, militant group, the Movement for the Emancipation of the Niger Delta (MEND) is claiming responsibility for damaging the pipeline. This is in addition to MEND's claims that it damaged the Shell pipeline that led to a force majeure declaration from the oil giant in respect of its Forcados grade crude oil shipments.

Agip was not available to confirm or deny the allegations.