Heirs Holdings Expands Hugely Into Oil & Gas

Heirs Holdings, a leading pan-African investment company has significantly expanded its oil and gas portfolio, with the acquisition of 45% of Nigerian oil licence OML 17 from Shell Petroleum Development Company of Nigeria, Total E&P Nigeria Limited and ENI.

The company, in partnership with its affiliated company Transnational Corporation of Nigeria Plc, Transcorp, announced today in Lagos that its unconditional acquisition of the participating interest in OML 17 and related assets, through TNOG Oil and Gas Limited (a related company of Heirs Holdings and Transcorp), means TNOG Oil and Gas will now have sole operatorship of the asset.

The transaction is one of the largest oil and gas financings in Africa in more than a decade, with a financing component of US$1.1 billion, provided by a consortium of global and regional banks and investors. OML 17 has a current production capacity of 27,000 barrels of oil equivalent per day and, according to estimates, 2P reserves of 1.2 billion barrels of oil equivalent, with an additional one billion barrels of oil equivalent resources of further exploration potential.

In its statement, Heirs Holdings said the investment demonstrated a further important advance in the execution of its integrated energy strategy and the Group’s commitment to Africa’s development, through long term investments that create economic prosperity and social wealth. Heirs Holdings’ heritage and approach to business, according to the statement, fundamentally underscores its commitment to inclusive development and shared prosperity with its host communities. Heirs Holdings is fully invested in the development of the Niger Delta region.

The company’s strategy of creating the leading integrated energy business in Africa is executed through a series of strategic portfolio holdings. Transcorp, on the other hand, is one of the largest power producers in Nigeria, with 2,000 MW of installed capacity, through ownership of Transcorp Power Plant and the recent acquisition of Afam Power Plc and Afam Three Fast Power Limited. Transcorp closed the US$300 million Afam acquisitions in November 2020.

Transcorp supplies electricity to the Republic of Benin, as part of an emphasis on promoting regional integration and delivering robust power supply to catalyze development in Africa. Transcorp also operates OPL 281, under a production sharing contract with the Nigerian National Petroleum Corporation (“NNPC”). Similarly, Heirs Holdings’ subsidiary, Tenoil, is the operator of OPL 2008, under a production sharing contract with NNPC. Tenoil also owns the Ata Marginal Field, which will commence production in Q2, 2021, with 3,500 barrels of oil per day.

The Chairman of Heirs Holdings, Mr. Tony Elumelu said of the acquisition: “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled. As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria.  We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.”

Elumelu thanked Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in Heirs Holdings.

Speaking on the investment, the President/GCEO of Transcorp, Owen Omogiafo, said the deal further “demonstrated Transcorp’s integrated energy strategy and our determination to power Africa.”

Heirs Holdings was advised on the transaction by Standard Chartered Plc, as Global Coordinator, and United Capital Plc, with a syndicate of lending institutions including Afreximbank, ABSA, Africa Finance Corporation, Union Bank of Nigeria, Hybrid Capital, and global asset management firm, Amundi. The deal also involves Schlumberger as a technical partner, as well as the trading arm of Shell as an offtaker.

Heirs Holdings now has one of Africa’s largest, indigenous oil and gas businesses, headquartered in Lagos, Nigeria, and led by a board and management team with significant regional and global experience in production, exploration, and value creation in the resources sector. The Group says it is committed to the highest standards of safety, health and community relations, together with best practice in governance and accountability.

Heirs Holdings’ investment portfolio spans the power, oil and gas, financial services, hospitality, real estate, and healthcare sectors, operating in twenty-three countries worldwide.

The company’s is inspired by the belief that the private sector is the key enabler of economic and social wealth creation in Africa and, driven by this philosophy, it invests for the long-term, bringing strategic capital, sector expertise, a track record of business success and operational excellence to companies it invests in.

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