The management of Shoreline Natural Resources Limited, SNRL, has reiterated claims over the acquisition of Oil Mining Lease, OML 30, and not London quoted, Heritage Oil Plc as widely reported in the media.
OML 30, located onshore in the delta region, covers 1,097 square kilometres and includes eight producing fields and associated infrastructure, including an interest in a segment of the Trans Forcados pipeline. The block has gross proved and probable reserves of 1,114 mmbbls of oil, estimated by independent technical consultants RPS Energy Consultants Limited.
The Share Purchase Agreement, SPA, for OML 30, which production peaked at 35,700 barrels of oil equivalent per day, bopd in November 2012, was signed on June 29, 2012, following the end of negotiations with the Shell Petroleum Development Company, SPDC divestment programme under its portfolio management.
Speaking on the transaction, which had generated a lot of public interests recently, the Chairman of Shoreline, Mr. Kola Karim, told a press conference in Lagos that Shoreline is a Nigerian company with a mission to boost Federal Government’s local content policy.
A visibly flustered Karim said, “It is very clear that the company that had a dealing or business relationship in the tender process with Shell, Total and Agip in the acquisition of OML 30 is SNRL which is a company owned in the majority by Nigerians. Due to the innuendos going around, it is important that the board of SNRL address the Nigerian public to state the true facts.
“As you will all recall, SPDC started the divestment process in 2007. Nigerian indegineous companies were encouraged to participate in the divestment process. The Federal Government encouraged the companies to divest due to the on-going unrest in the Niger Delta region. You will recall that during this period, a lot of IOCs capped their wells in the Delta region. We earn revenue from taxation and if we do not produce we will not earn revenue.
““A lot of Nigerian companies that were interested in the process, teamed up with international companies. These international companies come with the much needed expertise and more importantly capital which is very important. Shoreline partnered with Heritage Oil Plc.”
He recalled that SNRL only came into the picture as the preferred bidder nine months after, when Conoil failed to close the deal the Shell Joint Venture. “We got a call nine months later that the winner of the bid, Conoil could not close the deal. So we were called upon to continue in the process.”
Heritage Oil involvement
He further clarified that SNRL, originally set out to acquire OML 30 and invited Heritage Oil to be its technical partners with Shoreline having the majority equity of 55 percent, while Heritage Oil has the remaining 45 percent.
Karim, who had no apologies for choosing Heritage Oil, noted that the British company, listed among the top 250 on the London Stock Exchange FTSE 250, boasts of about 8,000 shareholders, including many institutional investors.
“Heritage meets the rigorous corporate governance standards set out by the Financial Services Authority and UK Listing Authority, UKLA, thereby meeting the requirements for a Premium Listing on the stock exchange,” he said.
Apart from its strong financial background, he also noted that the British company played a leading role the development of the oil industry in Uganda, Ghana, Congo Brazzaville, Angola and Kurdistan.
So rather than maligning the partnership and trying to find loopholes in the asset acquisition, the Shoreline boss argued that Nigerians should instead be proud of the deal. This is because for the first time, a Nigerian company attracted the full support of top international financial institutions, including JP Morgan, Standard Bank and the Chinese Bank for International Development.
“For the first time in the history of this country JP Morgan, and Standard Bank put their money into a local company. Government has been pushing for local content development, and $850million came through a local company as foreign direct investment into Nigeria, at a period when investment levels have dropped significantly,” he said.
He also disclosed that the Chinese Bank gave the company a facility of $200million without a Chinese content, which in his opinion is a vote of confidence for Shoreline by these international institutions.
Given the negative media on the asset acquisition on account of the involvement of former British soldier, Karim maintained that there must be an undertone as Mr. Anthony Buckingham is not a fugitive of the law.
“Mr. Anthony Buckingham is over 60 years old, and all that have been written on him happened over 35 years ago. He is not a wanted man in any country,” he added.
Corroborating the claims, the Chief Financial Officer, CFO, Heritage Oil, Mr. Paul Atherton, speaking in defence of his boss noted that Buckingham has ceased from security operations.
With regard to the interest in Nigeria’s oil and gas, he said, “The acquisition of OML 30 is transformational for Heritage, providing a material change in production and reserves whilst pursuing our strategy of generating shareholder value.
“Heritage is very excited to have invested in Shoreline Natural Resources Limited, a local Nigerian company with Shoreline Power Limited. Shoreline Natural Resources combines Nigerian relationships and business experience with technical expertise and financial competency and is focused on being one of the leading indigenous companies in the oil and gas sector in Nigeria. We look forward to continuing to build local relationships and partnerships with the communities in the delta region and using the interest in OML 30 as a platform to build a substantial long term presence in Nigeria.”
Clarifying on the terms of the purchase agreement, the Managing Director/Chief Executive, SNRL, Dr. Ladi Bada, noted that Shoreline is merely a shareholder in OML 30, with 45 percent equity, with the Nigerian National Petroleum Corporation, NNPC, through its subsidiary, Nigerian Petroleum Development Company, NPDC, holding the operating right with 55 percent.
According to him, at no time did Shell indicate it was going to hand over operatorship upon the sale of its shares, as widely speculated, saying, “At no point in time did Shell say it will transfer operatorship. We are comfortable with NPDC as the operator and we have full confidence in the company given its antecedents.”
He added that all though the transition period for the change of operator, Shoreline had worked closely together to ensure a smooth sail. Thereafter, he said is happy to sit back and tidy up details on the development of the asset.