African Export-Import Bank (Afreximbank) has disbursed about $250 million of the $1.1 billion that supported Trans Niger Oil and Gas Limited (TNOG) acquisition of 45% stake in OML 17 onshore oilfield.
With this $250-million Reserve-based lending facility, AFREXIMBANK has emerged) as 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 participants in the consortium of lenders include Africa Finance Corporation, Union Bank, Shell, Hybrid Capital and Schlumberger, with TNOG advised by United Capital Plc.
The five-year $1.1 billion facilities, which was signed in December 2020, despite the economic headwinds caused by the COVID-19 pandemic, were led, as Mandated Lead Arrangers, by Afreximbank, Standard Chartered Bank and ABSA.
Following the acquisition, TNOG said it would now operate the OML 17 onshore oilfield on behalf of its partner, and the Nigerian National Petroleum Corporation, which owns the remaining 55% working interest on behalf of the Federal Government.
Speaking of the transaction, AFREXIMBANK President, Benedict Oramah, said the facility further underscores AFREXIMBANK’s commitment to ensuring that indigenous African companies were able to play a more dominant role in the operations of specialized oil and gas assets in an industry hitherto dominated by International Oil Companies.
TNOG as the Operator of OML 17 will invest in an accelerated production ramp-up thereby boosting foreign exchange earnings and employing more Africans.
“The company’s objectives resonate with AFREXIMBANK mandate. We congratulate Heirs Holdings for keeping the Africa flag flying,” Mr Orama said
TNOG is a subsidiary 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.
The Chairman of Heirs Holdings, Tony Elumelu, 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,”
AFREXIMBANK 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, South Sudan, etc.
AFREXIMBANK established in October 1993 is a pan-African multilateral financial institution with the mandate of financing and promoting intra-and extra-African trade.
Owned by African governments, the African Development Bank and other African multilateral financial institutions as well as African and non-African public and private investors.