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Midwestern Gets Extension for Acquisition of Mart Resources
Midwestern Oil and Gas now has until 26 July to complete the financing it requires for the purchase of the Toronto Stock Exchange listed Mart Resources. The agreement of 15 March between the parties originally gave Midwestern until July 16 to come up with the finance to pay the agreed $0.80 per share to acquire all the issued and outstanding common shares of the Canadian company. Mart agreed to give Midwestern more time following interest from a significant Middle Eastern Group. Midwestern has already signed a framework agreement with the group. After examining the agreement, Mart's Board of Directors said they were satisfied that, given the progress that had been made on the financing and the parties involved, it was appropriate to grant the requested extension.
If Midwestern has not completed the financing by the new deadline, Mart can terminate the agreement. Midwestern will also have to pay Mart the reverse break fee of CAD$5.8 million (about US$4.58) as per the agreement of 15 March.
Meanwhile, at the annual and special meeting of shareholders and option holders held on the 16th of June, the decision of the Board to enter into the arrangement with Midwestern was ratified by the shareholders.
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Helios and Vitol Acquire 60% of Oando Downstream Business
After months of speculation, Oando Plc has finally confirmed that it has reached agreement to sell a substantial part of its downstream business to a joint venture between Helios Investment Partners and the Swiss based oil traders, Vitol. The total consideration of US$461.3 million will be funded by a $276.8 million cash investment and $184.5 million in preference shares issued to Oando Plc. Under the terms of the deal, HV Investments II B.V. (HVI), a fund "advised" by Helios and Vitol will acquire 49 per cent of the voting rights and 60 per cent of the economic rights in Oando downstream once they receive regulatory approvals. Following the acquisition, 49 per cent of the voting rights will be held by Oando Plc, whilst HV Investments will own 49 per cent and a Nigerian affiliate of Helios will own 2 per cent.
With a primary and secondary listing on the Nigerian Stock Exchange and the Johannesburg Stock Exchange respectively, Oando Group said in a statement that the unique arrangement would allow for accelerated expansion and increased investment for Oando Downstream. Yomi Awobokun will continue as Chief Executive Officer of Oando Downstream whilst other directors are expected to be appointed to the board to represent the interests of Vitol and Helios.
Commenting on the transaction, Wale Tinubu, Group Chief Executive of Oando Plc said, "By working with Vitol, a global energy and Commodities Company and the largest independent trader of energy products, and Helios, a premier Africa-focused private investment firm, Oando Plc has repositioned Oando Downstream for a new era of investment growth and profitability." Tinubu also confirmed that the divestment means it can focus on its upstream and midstream business after completing the acquisition of ConcocoPhillips' upstream business last year. The group raked in $2.9 billion last year and has a market capitalisation of over $1.
The Oando downstream business consists of its retail outfit, Oando Marketing, with over 400 retail outlets and terminals in Nigeria, Ghana and Togo. In addition there is Oando Supply and Trading, a physical trader of petroleum products in the sub-Saharan region, while Oando Trading Limited (Bermuda) trades crude oil and refined products in international markets. Apapa SPM operates a marina jetty and subsea pipeline system that will be capable, on completion, of berthing large vessels at Apapa, Lagos. Finally, Ebony Oil & Gas Limited is a Ghanaian company with a provisional bulk distribution company license supplying white products.
London based private equity firm, Helios Investment Partners has found a way of making easy work of raising funds for African investments. Africa-focused and predominantly led and managed by an African team, they have raised over $3 billion, which they now have under management. They have invested across the African continent and their portfolio companies are operating in over 35 African countries.
Partners in the deal, Vitol trades over 5 million barrels of crude oil and oil products per day and revenues in 2014 were $270 billion. Although founded in Rotterdam in the Netherlands, Vitol has a large presence in Switzerland, including Zug, along with other large Swiss oil traders.
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OPEC Daily Basket Price Stood at $58.05 a Barrel Friday, 3 July 2015
The price of OPEC basket of twelve crudes stood at $58.05 a barrel on Friday, compared with $58.99 the previous day, according to OPEC Secretariat calculations. It continues to hover just below the $60 mark, refusing to sustain the rise every time it goes above $60.
The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
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NNPC Plays Down New Fuel Shortage
The Nigerian National Petroleum Corporation (NNPC) is working hard to re-assure Nigerians that it has the fuel situation under control as petrol queues began to build up again in Abuja and other parts of the country. In Anambra State, the pump price of petrol has risen to N500 per litre from the official selling price of N87.
Keen to distance itself from the troubled end to the last government when the nation began to shut down as fuel shortages threatened to bring services in the country to a halt, NNPC spokesperson, Ohi Alegbe, has released a statement to confirm that there is sufficient petrol in stock to last the country 25 days even if national consumption should reach 40 million litres a day.
Alegbe said that supply to retail outlets was being accelerated as he tried to assure the nation of the stability of supply. He added that the coastal depots were also holding additional stocks in the national strategic reserves at Calabar, Port Harcourt and Warri.
Industry watchers meanwhile are urging the government to clarify its position on deregulation as marketers continue to hold back from importing more products while the uncertainty persists. The brief respite from the fuel scarcity experienced following the transition to the President Buhari's government came as a result of marketers delivering imports that were owing to the government. The rush to deliver came after marketers had to open their books to the Economic and Financial Crimes Commission for investigations into historic delivery shortages.
Things are back to a holding position as marketers refuse to import. As a result, petrol queues are back and the price of fuel continues to escalate. In some parts of the country, petrol prices are now probably more than they would be without petrol subsidy. The call continues to grow for deregulation.
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Seven Energy Secures Additional $52 Million Funding
Barely two weeks after announcing that it had secured $445 million debt funding, uniquely gas focused Nigerian independent, Seven Energy has announced that is has also secured another $52 million debt funding. The company said certain of its wholly-owned subsidiaries have entered into two separate debt facilities with "prominent" European institutions with up to a six year tenor. The new facilities will rank pari passu for security with the Senior Secured Loan Notes issued in October 2014. The funds will be used for ongoing development projects and working capital.
Earlier, Seven Energy had secured a senior debt facility of $445 million for its subsidiary, Accugas. This facility, which was arranged by FBN Capital and FCMB Capital Markets will be used to re-finance Accugas' existing project-finance and acquisition-finance senior debt facilities. Some of the funds will be used to support additional medium-term capital requirements. Seven Energy's midstream infrastructure assets, focused in south east Niger Delta, include the 200 MMcfpd Uquo gas processing facility and a gas pipeline network of 227 km with distribution capacity of 600 MMcfpd.
The company with interests in the Uquo Field and the Stubb Creek Field (south east Niger Delta), an indirect interest in OMLs 4, 38 & 41 through a Strategic Alliance Agreement with Nigerian Petroleum Development Company (north west Niger Delta) and licence interests in OPL 905, 907 and 917 (Anambra basin) has recently denied that it is in discussions with any third party with respect to a merger or planning to make any acquisitions at this time.
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Ladan Takes Over from Osahon as New DPR Director
As the oil and gas industry waits with baited breath to see what restructuring awaits the sector under the new President, one of the crucial oil regulatory appointments has been revealed, with the appointment of Mordecai Danteni Baba Ladan as the new Director of the Department of Petroleum Resources (DPR). He takes over from George Osahon, whose 2-year tenure, which began under the former Minister of Petroleum Resources, Diezani Alison Madueke, expired on the 19th of June. There were premature reports of Osahon's departure from DPR but he remained at his desk until his replacement was announced. Osahon has now handed over to his successor.
Some had been hoping Osahon would be spared the chop but industry commentators are not at all surprised at the decision. All those appointed by the former Minister of Petroleum Resources, Alison Madueke, are tarred, in the eyes of the President, with the same brush as their former boss and are expected to be swept out in due course.
With regards to one of the most critical appointments, the Ministerial Role, the strongest suggestion making the rounds is that the President will take on that role himself and perhaps appoint a Minister of State to support him. He seems in no hurry to appoint his Ministers leading to handwringing and exasperation in many quarters. African Foreign Policies students of Stephen Chan, Professor of World Politics at SOAS, University of London, asked: "Is this a case of another old man who wishes to do well, but doesn't know how in a world that has grown too complex for his previous experience?"
On the other hand, others are saying that Nigerian situation is unique and it is best that he takes his time to make the right appointments. They say that no amount of time will be too much to make sure he gets it right.
Whatever the case, Ladan's appointment has been greeted with approval by the industry. The most senior man at DPR, he knows the industry well, having headed several departments there. As the country and the industry stand on the verge of the change that restructuring will bring, a familiar hand will be needed to help steer the ship. The industry is hoping Ladan is their man.
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Buhari Dissolves NNPC Board
President Buhari has dissolved the entire Nigerian National Petroleum Corporation Board, an indication that a wholesale restructuring may yet be to come. The Corporation, which has been riddled with allegations of corruption for many years, appears to be headed for major re-organisation.
The Board members who have now been dismissed are the Group Managing Director, Joseph Dawha; Bernard Otti, Group Executive Director, Finance & Accounts; Dan Efebo, Group Executive Director, Corporate Services; Ikechukwu Oguine, Coordinator, Legal Services and Secretary to the Corporation. Other board members were Alhaji Abdullahi Bukar, Danladi Wadzani, Olusegun Okunnu, Danladi Kifasi, Steven Oronsaye. The former Group Executive Director, Exploration and Production, Abiye Membere who was sacked by the former Minister of Petroleum Resources, Diezani Alison-Madueke, was never replaced.
The Minister of Petroleum Resources is Chairman of the Board. There are calls for the ties between the political appointee and the state oil corporation to be broken so that the oil corporation becomes independent and is allowed to function as a commercial entity. In the wake of recent and historic allegations of corruption, they also want government receipts from the oil industry to be credited direct to the Federal Revenue Account rather than routed through the Nigerian National Petroleum Corporation where it seems a good amount of the funding never makes it to the national coffers as they remain "unremitted."
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Nigerian Fixer Sues Swiss Trader Glencore Over "Unpaid Fees"
The murky world of international oil trading has been laid bare in a London lawsuit filed by Nigerian oil and gas consultant, Og Amazu, against Swiss-based trading giant, Glencore Plc. The David and Goliath battle is for $10 million, which Amazu says Glencore, one of biggest diversified commodities traders in the world, owes him. According to Amazu, who has been described as an international "fixer" he is owed $5 million money for his part in getting 15 Russian sailors freed from Nigeria in 2013. The money, he says was promised to him by Beard, Head of Oil for Glencore. The other $5 million he claims is for meetings he organised between Beard and Nigerian officials in London in 2014. The payments, according to Amazu, were to be structured through a British Virgin Island company as loans, which would run indefinitely.
In the case, which is to be heard in the Queens Bench Division of the High Court in London, Amazu says that he was promised the money for helping to secure the release of the sailors who were detained by Nigerian authorities on suspicion of gun smuggling after their vessel, Seadiver, was found to be carrying 14 Kalashnikov rifles, 22 Benelli MR1 rifles and 8,000 rounds of ammunition. He claims that he made introductions to high-ranking Nigerian officials in connection with the release of the detained Russian crew. The vessel was owned by a Russian state-owned company, clients of Glencore.
Glencore has denied the allegations saying that it will defend the case vigorously. Much more detail is expected to emerge about the relationship between Amazu and Glencore, after papers filed in court revealed that Amazu, claims to have earned $64 million from Glencore since 2007 when he began working for the London FTSE 100 company, said to be valued at $57 billion. As further details are revealed, the case is likely to provide an insight into the oil trading world and what kind of value is being provided to make introductions to high-ranking government officials worth millions of dollars.
Glencore is one of the companies fingered by Swiss Non-Governmental Organisation (NGO) Berne Declaration (BD) two years ago in a sensational report in which Swiss traders were accused of colluding with the Nigerian state oil company, Nigerian National Petroleum Corporation (NNPC) to defraud the country of billions of dollars through opaque deals and trades. The traders involved denied the allegations and in spite of investigations by the parliamentary committees in Nigeria, no prosecutions have ever been brought against those accused by BD.
Glencore has tried very hard to shake itself free of the unsavoury reputation of its founder Marc Rich who was indicted in the United States for tax evasion, fraud and illegally trading with Iran during the hostage crisis of 1979-1981. Rich remained a fugitive from the US until the intervention of a socialite friend won him a sensational pardon from President Clinton on his last day in office in 2001. Even after Marc Rich sold his interest in Glencore, the company remained tainted by association.
In 2011, Warren Gilman, Chairman & CEO of CEF Holdings told CNBC "We've probably exorcised the ghost of Marc Rich, but ... it will be a bit of an adjustment for management and the board of Glencore, to get used to the amount of, not only disclosure, but perhaps the change in attitude and change in business style that this is going to necessitate."
By the time the case is over it will be interesting to see if the revelations demonstrate the change in attitude and business style alluded to in that interview.
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Aveon Offshore Completes Sail Away of Erha North Phase 2 Subsea Structures
Aveon Offshore, a fully Nigerian owned engineering and fabrication services company, has successfully completed the fabrication, supported Manifold/Suction Pile testing and loading out of these components for the Erha North Phase 2 project.
The load out and sail away of the 5 suction piles, production and water-injection manifolds and Riser Base Lift Module with Choke Loop Bridge has been going on since October 2014 and has now completed with the final batch of 5 Mudmats with Foundation Base and 2 Production Manifolds with Pigging Loop recent sail away. Other works on the project remain ongoing, including the fabrication of the Xmas tree elements for which delivery is said to be on schedule.
Aveon won the work for the Erha North Phase 2 project from OneSubea Offshore Systems Nigeria Limited. The contract was for the fabrication and load-out of approximately 1,200 tons of subsea structures including 5 manifolds and modules with associated suction piles, various Xmas tree frame elements and control system foundations for the Esso Exploration and Production Nigeria Limited (EEPNL) Erha North Phase 2 Project in 2013.
Aveon added a dedicated 2,000 m2 high-bay workshop to its 280,000 Sqm fabrication yard in Rumuolumeni, near Port Harcourt to accommodate the workload. The company says that the project has generated over 550,000 productive man-hours of over 20 months.
Oddvar Bryne, Project Director of OneSubsea, Oddvar Bryne, said: "I do believe [this is] one of the most successful projects delivered from Aveon ever. I will never forget this team ever and you will be remembered in the OneSubsea/Cameron System for sure for an outstanding performance. Well done."
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Oando Plc Board Changes
Oando shareholders have been advised of the appointment of Dr Tanimu Yakubu Muhammad as a non-executive director to the Board of the Company effective June 30 2015. Dr Tanimu Yakubu Muhammad's working career spans a number of notable organisations during which he held such key positions as the Head of Department, Credit and Marketing, New African Merchant Bank Limited, the Head, Investment and Economic Desk, Afri-project Consortium Limited, Abuja, Honourable Commissioner, Ministry of Finance, Katsina State, Managing Director/CEO Federal Mortgage Bank, Abuja, Deputy Chief of Staff Federal Republic of Nigeria 2007/2008. He was also the chief Economic adviser to the President and Commander in chief, Federal Republic of Nigeria In 2007.
Meanwhile, non-executive director, Nana Appiah-Korang, has resigned from the Board with immediate effect. Ms. Appiah-Korang has tendered her resignation due to increasing demands of other professional interests. While serving on the Board, Ms. Appiah-Korang was an active member of the Board and its subcommittees and contributed to the improvement of Oando's governance and risk management practices in keeping with global best practice standards.
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SPDC - Provision of Corporate Hosting & Storage Maintenance Service
Shell Nigeria Exploration and Production Company Limited (SNEPCO) invites interested and registered Nigerian companies to respond to the opportunity for the provision of corporate hosting & storage maintenance services. The scope of services involves the provision of Hardware equipment support, maintenance and upgrade activities for servers (IBM, HP, DELL etc.), storage (NetApp, EMC etc.), backup devices (IBM, Sun etc.), reprographics and other related infrastructure for operating systems in use in SPDC and the Procurement of standard server and storage replacement/enhancement parts, licenses, warranties, peripherals, software, middleware and consumables (such as Processors, tapes, labellers, disks, memory, controllers, boards etc. Only Tenderers who are registered in the 3.11.07 operating systems installation / support services NJQS product/category shall be invited to submit technical bids. The closing date for this opportunity is 13th July 2015.
Total - Provision of Internet Service
Total Exploration and Production Nigeria Limited (TEPNG) invites interested and registered Nigerian companies to respond to the opportunity for the provision of internet service for residential area network and provision of mobile broadband service. The scope of services involves the provision of reliable and dedicated internet capacity with flexible technology to support future upgrades. Only Tenderers who are registered with the relevant Product/service Category shall be invited to submit technical bids. The closing date for this opportunity is 15th July 2015.
Pan Ocean - Provision of Petroleum Products
Pan Ocean Oil Corporation Nigeria) invites interested and registered Nigerian companies to respond to the opportunity for the provision of petroleum products. The scope of services involves the annual supply of a total volume of 10 million litres and 0.25 million litres of AGO and PMS respectively to Pan Ocean locations in Lagos, Benin and Ovade-Ogharefe flowstation. Only Tenderers who are registered in the relevant NJQS product/category with 2.07.02 petroleum products [gas, oils, fuels] shall be invited to submit technical bids. The closing date for this opportunity is 17th July 2015.
SPDC - Provision of Corporate Radio Maintenance Contract
Shell Nigeria Exploration and Production Company Limited (SNEPCO) invites interested and registered Nigerian companies to respond to the opportunity for the provision of radio maintenance services. The proposed contract will commence in the 1st quarter of 2016. The scope of services involves the provision of corrective and preventive maintenance of diverse radio transmission systems, multiplex systems, power supply systems, CATV systems, emergency shutdown (ESD) systems, aviation warning light systems on mast/towers, tower rigging activities and any other telecommunications systems repairs and maintenance. Only tenderers who are registered in the 3.11.20-telecommunication installation/support services NJQS product/category (A-D) shall be invited to submit technical bids. The closing date for this opportunity is 22nd July 2015.
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Oil Council's Fourth Africa Assembly Concludes in Paris
The fourth Africa Assembly organized by the Oil And Gas Council has just concluded in Paris where some of the most influential African oil and gas company CEOs and top executives were to be found. Over the course of 3 days, more than 800 attendees from 59 countries heard their peers in the industry discuss the state of play of African oil and gas.
In the opening session on "Africa in the era of cheap oil," the audience was reminded that the long game was crucial for survival. It was crucial for deepwater potential that companies work creatively and co-operate with the national oil companies (NOCs) and indigenous players if this potential is ever to be economically realised, they were told. Until there is a more balanced share of risk and reward, the industry is in danger of repeating the cycle, and only ever being reactive.
Independents called for fiscal and legal stability. They also asked governments to be flexible if they wanted to keep investors and international players interested in investing the capital in African oil and gas. Companies were urged to squeeze the most out of every barrel given the healthier dollar-per-barrel rate that some regions in Africa enjoy.
Regional updates gave an insight from many countries including Gabon, Equatorial Guinea, Namibia, Kenya, Uganda, Madagascar, Central African Republic, South Africa, and Morocco. It was clear from the presentations that there is still plenty to play for in Africa, from frontier exploration, to deepwater elephants, and even bringing new technologies to mature fields.
Gas-to-power opportunities for upstream players was an issue for many as international gas prices remained consistently low.
The session on West Africa created some excitement, demonstrating the interest in this region. The quality of local partners and expertise was noticeable leading one speaker to call on players to think of "above ground challenges" rather than "above ground risk". One prediction is that the region will reap the benefit of new technologies that are flooding into Africa. Speakers from Nigeria during this session were Pade Durotoye, CEO of Oando Energy Resources and Ademola Adeyemi-Bero, Managing Director of First E&P, fresh from the completion of the acquisition of two Shell and two Chevron divested assets.
At the sold out dinner in the French capital, Wale Tinubu, Group CEO of Oando Plc was named the African Executive of the Year. He was given the award in recognition of his pioneering leadership of Africa's oil and gas sector. This was the second year running that the award went to a Nigerian. Last year, it was given to the Chairman of Seplat, A.B.C. Orjiakor.
The Oil Council plans its first West Africa Assembly in Lagos from October 13th to 14th whilst the 5th Africa Assembly will take place next year in London in June.
The Oil & Gas Council describes itself as the most senior and influential network of oil and gas executives in the world, connecting oil and gas executives, and in turn their companies, to each other and to their partners in the finance and investment worlds.
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Remi Aiyela
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