PETAN: Elemelu’s OML 17 Acquisition, a Strategic Move

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Chris Paul

The Petroleum Technology Association of Nigeria (PETAN) yesterday said Tony Elumelu’s acquisition of Shell’s OML 17 was a bold strategic move for the oil and gas industry in the country.
PETAN’s President, Emeka Ene made this remark in a statement he issued yesterday.

He said the bold move to acquire OML 17 “is certainly strategic from the industry perspective.”
According to him, three mega-trends have emerged from the impact of the global pandemic including deglobalisation, capital flight and digitalisation.

He said: “While we in Africa and Nigeria specifically may appear helpless, this scenario presents opportunities to grow from the inside-out.

“With this context investment in idle assets becomes an essential path to generating near team growth in an industry that has flat-lined over the last five years.
“Nigeria was only able to attract less that 5 percent of the over 74 billion dollars in FDI that flowed into Africa. The answer lies within and the OML 17 acquisition creates new opportunities for growth.

“The major concern is that the Nigerian investor recognises that the acquisition places a burden to utilise 100 per cent local services companies to develop the asset and not fall into the trap of believing that multinational companies are the way to go when Nigeria companies large and small have proved competence, delivered technology and operational excellence even at times of grave economic and environmental constraints.”
Rather than seek credible companies locally, he said there “is a tendency to circumvent the provisions of the Local Content Act through MOUs with fronts and briefcase operators.

“Local content is a 360 degrees commitment that applies to the Nigerian operator and the service company equally,” PETAN’s president said.
Expressing his joy at the purchase of such a huge asset by a Nigerian investor, Ene said he was confident that Elumelu recognised the strategic importance of the effort.

He said Elumelu, a Delta-born billionaire, “has always been in the forefront of Nigeria and Africa first. These are interesting times.”
Meanwhile, another PETAN member and major player in the local content arm of the nation’s oil and gas industry, Diran Fawibe also congratulated Elumelu.

Total Nigeria Oil and Gas Limited (TNOG), an integrated energy company founded by Tony Elumelu, recently acquired a combined 45 per cent interest in Oil Mining Lease 17 and related assets belonging to three international oil companies operating in the Eastern Niger Delta area of Nigeria.

Shell Petroleum Development Company (SPDC) Nigeria Limited, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited ceded 30 per cent, 10 percent, and five percent interest respectively in the lease, to TNOG.
SPDC had, in a statement, announced the completion of the sale of its 30 per cent interest in the OML 17 and associated infrastructure to TNOG for a consideration of $533m. The completion followed the receipt of all approvals from the relevant authorities of the Federal Government of Nigeria.