Facts have emerged as to why Seplat, Nigeria’s biggest indigenous exploration and production company lost out in the bid for oil mining leases (OMLs) 24 and 29, the most prized acreage in the ongoing divestment by Shell, Total, and ENI.

The company stated that its bid “was not the highest priced offer”, according to Oil and Gas Report. The company further explained that this was why its “strong bid” for the Oil Mining Leases “did not lead to the company’s selection as preferred bidder.”

Though Seplat did not disclose the value of its ‘strong bid’, it simply said it “will continue to exercise price discipline”.

The statement was made in the company’s first interim report since its listing on the Nigerian and London Stock Exchanges in April 2014. It was the first official disclosure by any party involved in the very competitive race for the 45 percent equity held by the three European majors in OMLs 18, 24, 25 and 29, all producing onshore acreages in the eastern Niger Delta.

Shell and the other companies had kept sealed lips held tightly about the bid, which had lasted close to 12 months and had involved over 50 companies and consortia.

United States-based, Pan Ocean had won OML 24. Reuters, had earlier reported that two Nigerian oil traders, Aiteo and Taleveras had jointly won OML 29, the most coveted of the four assets, though the actual cost could not be ascertained.

Shell’s own figures stated that the remaining reserves (P1+P2) in OML 29 are about 2.2Billion barrels of oil equivalent (BOE). The hydrocarbon fields on the acreage could deliver as much as 160,000BOPD and 300MMscf/d at peak, with focused, aggressive work programme. It was reported.

A joint bid by Midwestern Oil and Gas and Mart Resources is said to have won OML 18, while a consortium of Nigerian and Canadian companies named Cresta is the preferred bidder for OML 25. When contacted, Midwestern Oil and Gas simply responded: “We’d talk about it later”.

The Seplat statement can be interpreted to mean that the company is not sorely disappointed with the outcome. Seplat is confident that there is “a substantial pipeline of other material opportunities that are being pursued,” according Austin Avuru, its Chief Executive Officer.  “We will retain our focus on acquisition opportunities where we can leverage Seplat’s technical and financial strength,” he said.

Seplat’s net cash position currently is approximately $285 million, following receipt of the gross proceeds of the IPO of $535 million and repayment of the MPI shareholder loan of $48 million, it said in the statement.

“All of our development projects remain on track, and we are confident of delivering our target production exit rate for this year of 72,000 BOPD, and of recovering as much of the production lost in the period as possible”, Avuru added.