By Sebastine Obasi
Plans by Petrobras, Brazil state-owned oil firm to sell 50 percent stake in its Nigerian oil and gas exploration joint venture, JV, with BTG Pactual Exploration and Production for $1.53 billion has hit the rocks as Vitol, one of the principal buyers has opted out of the deal.
Vanguard learnt that government bureaucratic bottleneck which has thrown up uncertainty in the deal led to the withdrawal of Vitol. Vitol Investment Partnership 11, which leads a consortium buying the assets has 50 percent stake, while each of Africa Oil and Delonex Energy has 25 percent. According to sources, Vitol is discouraged by the delay caused by government officials who placed certain conditions before final approval can be granted for the deal to sail through.
This has not gone down well with Petrobras, which appears to be in quandary. “We made sure due diligence was done as expected. Officials of Department of Petroleum Resources, DPR, were sent to Petrobras in Brazil. They also verified the technical capability of the Vitol-led consortium and made sure all necessary conditions were fulfilled. They made their recommendations in favour of the sale.
“One year down the line, not much progress has been made from the government’s side. Incidentally, it was stated in one of the conditions with the consortium that any party that feels dissatisfied could opt out. Vitol just did that,” a source privy to the divestment told Vanguard.
It could be recalled that late last year, Petrobras had announced its plans to sell its stake with BTG Pactual, which will continue to hold its 50 percent stake in the Petrobras Oil and Gas (POGBV) JV, which owns interests in two blocks that contain three fields located more than 100km off the coast of Nigeria. The assets owned by the POGBV include an 8 percent stake in block OML 127, which contains the Agbami production field; and a 16 percent stake in block OML 130 comprising the Egina and Akpo fields. Discovered in 1998, the Agbami field is operated by Chevron affiliate Star Deep Water. Other partners include Equinor and Nigerian national oil company NNPC.
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Impressed by the deal then, Vitol Chief Executive Officer, Russell Hardy said: “We are pleased and proud to add this significant upstream asset to our infrastructure and downstream Nigerian investments. POGBV has a strong non-operated portfolio, managed by Chevron and Total, and which represents around 20 percent of Nigerian production. Vitol looks forward to growing and investing in Nigeria.”