How We Struck Largest Oil And Gas Financing Transactions In Africa
OpenLife Nigeria reports that following the success story of Heirs holding’s investment in the oil and gas sector, Tony Elumelu, chairman of the conglomerate has disclosed, in part, how the deal was struck.
Excited about an award from Project Finance International (PFI), in recognition of Heirs Holding $1.1billion financing and acquisition made in the acquisition of OML 17, Elumelu stated that team work and commitment to duties enabled the feat.
In a piece on his Facebook page titled “TOE Congratulates Team Heirs Oil & Gas,” Elumelu said it is the beginning of greater business succeses in Nigeria and Africa. His piece is reproduced below unedited.
Last week, our team at Heirs Oil and Gas (HHOG), was in London to receive the “Africa Deal of the Year 2021” award from Project Finance International (PFI), in recognition of the $1.1billion financing and acquisition we made last year, acquiring OML 17.
This deal remains one of the largest transactions in the oil and gas financings in Africa in more than a decade.
What an honour!
When we set out on this journey, we had a clear vision: to create Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The first step was raising capital to acquire the assets, a mammoth task – but the team and I accomplished one of the largest oil and gas financings in Africa in more than a decade, with a financing component of $1.1 billion, provided by a consortium of global and regional banks and investors. It was a complex and innovative transaction – a feat, which has brought this welcome recognition.
Acquiring the assets was one thing, with ownership comes responsibility, not just financial, the need to ensure the assets were performing optimally and creating value for all stakeholders, including the host communities. One year and four months later, I am proud of our accomplishments and here are some of the highlights:
We built an extraordinary team, mixing global talent, with our own HH’s team. Our industry leaders have learnt our culture of execution and excellence, we have appreciated their technical expertise. It has been exciting and satisfying to see this occur, supported by an incredible and engaged non-executive board.
On July 1st, Shell Petroleum Development Company (SPDC) completed the handover of operatorship of the OML 17 asset to HHOG a month ahead of plan, and operations since then have been without any major incident or accident, demonstrating the competence of the assembled team.
On 5th October 2021, HHOG ramped up oil production to 50,000 Barrels of Oil, from 27,000 barrels, within the first 100 days of takeover.
On May 1st, 2021, HHOG took over Agbada NAG Plant construction Project which had been under construction for 10 years, and on November 21st, 2021, HHOG achieved first gas from the Agbada NAG Plant, demonstrating capability and expertise by quickly bringing the plant to mechanical completion and identifying further growth opportunities.
In 2021, HHOG supplied gas to Transcorp Power, achieving our gas to power objective, and demonstrating our integrated energy play vision.
The story of HHOG is a story of resilience, perseverance, and triumph against the odds. It is a story that demonstrates our commitment to society: the vision of creating Africa’s first truly integrated energy multinational, uniquely focused on Africa and Africa’s energy needs, providing thousands of jobs, and improving lives and communities across the continent.
It is a story with lessons: a clear strategic goal – an integrated resources giant, focused on Africa. We executed through persistence, drove insitutionalisation, engineered partnerships, global and local – and delivered.
HHOG is committed to more – we have conducted our affairs and operations in line with both national regulations and international best practices – we have put significant investment into the assets, investment that begins to address issues such as gas flaring and community engagement. It takes time to change embedded practices and “change the paradigm” – but that is exactly what we are doing.
And there is the bigger picture. HHOG gas will create domestic power in Nigeria, fuel the plants that Heirs Holdings has bought and turned around – and where we now even exporting power to our neighbours, breaking down barriers, driving regional integration.
We are overturning previously held myths, changing perceptions and building a unique model of Africans building for Africans in Africa, within the oil and gas sector – creating value – not exporting it.
Such a remarkable feat would be impossible without the resilience, tenacity and the focused execution demonstrated by our people.
So, I congratulate the team at HHOG, led by CEO, Osayande Igiehon, for this outstanding recognition, and of course our people at Heirs Holdings, who support this vision in one way or the other. Thank you all for your commitment and contribution towards achieving our purpose of improving and transforming lives in Africa.
Excited about more milestones to come from HHOG!