March 19, 2018

Shell, GTbank agree $270m oil-backed loan to Amni

easy money

The seized money.

Shell Western Supply   and Trading Limited, a subsidiary of Royal Dutch Shell and Guaranty Trust Bank have granted a $270 million loan to Amni International Petroleum Development Company Limited.

The seized money.

Amni is an independent oil and gas exploration and production company in Nigeria, with two producing offshore operations in Nigeria and an interest in a newly awarded block in Ghana. Amni owns its own infrastructure including platforms, pipelines and offshore terminals.

The terms of  loan will give Shell Western Supply and Trading sole access to the 16,000 barrels per day (bpd) of oil the company pumps in two fields off Delta region.

The company’s production at offshore fields, including Amni’s Ima and Okoro/Setu, is difficult to maintain. But, Amni said the loan would allow them to further develop the fields.

The company also has an offshore concession in Ghana. According to the company’s Chief Executive, Tunde Afolabi, “We are excited to work with GT Bank and Shell as commercial and financial partners to enable the realisation of Amni’s ambitious plans for growth.”

When contacted, a spokesperson for Shell Western Supply and Trading Limited stated: “Shell Western Supply and Trading Limited can confirm it has signed a loan agreement with Amni International as part of a package that includes long-term crude oil off-take contracts. We cannot share further details about the deal for reasons of confidentiality.”

The Group Head, Communication and External Affairs, GTbank, Oyinade Adegite, told Vanguard that, “The release did not come from us. So, unfortunately, we do not have a statement available to send to you. We do not usually issue press statements for facilities and loans.

“We will try and see if we can get a statement but we might not be able to come back to you on this till Monday.”

In January, 2018, oil trading firm, Vitol Group, reached a $530m deal with a Nigerian oil and gas producer, Shoreline Group, to finance an oilfield in exchange for access to some of the oil it produces, the Nigerian firm said on Thursday.

The agreement with Shoreline will provide the company with cash to refinance existing debt and further develop the Oil Mining Lease 30 in the Niger-Delta. The field currently produces 50,000 barrels per day and has an estimated one billion barrels of oil reserves. Shoreline has a 45 per cent interest in the field. The Chairman, Shoreline Group, Mr. Kola Karim, stated that the “transformational” deal would enable the company to step up gross production to as much as 100,000bpd over the next year.

“The funds will be used to refinance existing debt and provide us with working capital to expand production. As part of the funding arrangements, Shoreline will work with Vitol to market the crude, and in the development of its export logistics capabilities,” he said.

The financing was arranged with support from Vitol, as well as Ecobank Transnational Incorporated, Fidelity Bank Plc, Union Bank of Nigeria Plc, FCMB Group Plc and Farallon Capital Management LLC. The Federal Government is also turning to private companies in an effort to finance everything from refinery upgrades to oil pipeline reconstruction.

Bigger oil companies and trading houses often extend financing to smaller oil and gas producers in deals that allow the financier preferential access to physical cargoes and give the recipient companies the cash they can use to develop and maintain their assets.