AITEO acquires Shell’s OPL 29, Nembe Creek pipeline for $2.7 billion

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As part of its strategy to position itself for greater participation in Nigeria’s oil and gas industry, Aiteo Group has acquired Oil Mining License, OPL 29, from Shell Petroleum Development Company, SPDC.

The oil lease, considered one of the most endowed acreages, was acquired along with Nembe Creek Trunk line, an associated crude oil pipeline, after the Group’s $2.7 billion bid was approved by the Department of Petroleum Resources, DPR.

The head of Communications Department of the Aiteo Group, Oseyemi Oluwatuyi, said while the actual cost of the acquisition of the oil block and Nembe pipeline was $2.562 billion, the balance was additional funds earmarked as working capital for their take-off.

The SPDC had divested from OML 29 reputed to be endowed with oil reserves in excess of about 2.2 billion barrels of oil equivalent (BOE), with additional capacity from its hydrocarbon fields to deliver about 160,000 barrels of oil per day and 300 million standard cubic feet (MMSCF/D) of natural gas at peak production.

Mrs. Oluwatuyi also explained that though Taleveras was part of a consortium that brokered the deal, it was not the leader, contrary to media reports.

She said Aiteo holds the controlling equity stakeholding of 85 per cent shares in the consortium that also includes five other companies. Of the about 2.7 billion units of shares held by the consortium, Mrs. Oluwatuyi said Aiteo Energy Resources Limited holds 2.294 billion shares; Tempo, which holds 10 per cent equity, controls about 270 million shares; and Taleveras holds 135 million shares.

The Nembe Creek Trunk line is one of Nigeria’s major crude oil transportation channel used to convey oil produced from the Niger Delta to the Atlantic coast for export.

The trunk pipeline is also an invaluable asset to operators in the oil industry as it serves as vessel available for hire by other oil exploration and production companies in country to convey their crude oil to the export terminal for onward transfer to the international markets

“The acquisition of these assets has deepened Nigeria’s indigenous participation in oil and gas exploration,” she said.

Mrs. Oluwatuyi said the acquisition of OML 29 and the 60-mile pipeline system would not only boost its capacity, but would serve as a major boost to the Nigerian Local Content Development initiative in the oil and gas industry.

Aiteo Group is a vertically integrated energy company interested in rapidly expanding the scope of its major businesses from oil and gas exploration and production services in the country’s oil sector into a fully diversified conglomerate with investments across key economic sectors.

These include investments in oil exploration and production, power, mining, agriculture, financial services, real estate and Infrastructure development.

The consortium pledged to bring its technical competence to bear in the development of the new assets towards the promotion of the local content objectives.

According to Mrs. Oluwatuyi, the development of the new asset would translate into opportunities for the creation of over 20,000 direct and indirect jobs in the exploration and production sub-sectors of the oil and gas industry.

Participation of indigenous companies in the operations of the country’s oil and gas industry has received significant boost with the implementation of the Nigerian content policy by the Federal Government.

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The Nigerian Content Development Monitoring Board, NCDMB, says more than 87 per cent of contracts for pipelines fabrication and construction in the Nigerian oil and gas industry awarded since the approval of the Nigerian Oil and Gas Industry Content Act, NOGICD, Act 2010 go to Nigerian firms with the requisite technical capacity and competence.

Oil and gas industry investment analysts say Aiteo Group’s investment is a demonstration of its commitment to the continuous growth and development of the country’s oil and gas sector in accordance with the law enacted in April 2010.

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