By Kenneth Ehigiator

One of Nigeria’s leading private equity firms, African Capital Alliance, ACA, has bought into First Hydrocarbon Nigeria Limited, FHN, operators of oil well, OML 26, which it recently acquired from Shell Petroleum Development Company, SPDC.

Announcing this in Lagos, one of ACA’s Director, Paul Kokoricha, said the company’s decision to but into First Hydrocarbon was informed by the need to demonstrate the capacity of indigenous companies to operate successfully in the upstream sector of the oil industry.

He said:  “The opportunity to invest in FHN is directly aligned to our growth investment strategy and commitment to provide support to develop the Nigerian indigenous sector.

“The obstacles to indigenous success in the upstream sector are well known and FHN’s combination of access to Nigerian capital, growth of indigenous capacity as well as the technical and operational excellence provided by their partners, Afren, are a strong basis for success.

“We believe that the acquisition of OML 26 was the first demonstration of the validity and strength of the company’s business model and look forward to working with the company on other future transactions.”

He said ACA would, through its funds, strive to improve the economic landscape of its markets while earning superior returns for its investor based on management excellence through professionalism and unquestionable integrity.

Noting that ACA was a dominant player in its markets with over $550 million under management and a significant track record of successfully exiting investments, Kokoricha said the focus of the company, with target capitalization of US$350 million, was on high growth opportunities and regional play possibilities in Nigeria and neighbouring Gulf of Guinea countries.

“CAPE III seeks to tap into deregulating sectors such as financial services, telecommunications, oil & gas, power (electricity) supply, manufacturing, and logistical services. CAPE III partners with local businesses and foreign strategic operators poised for regional growth from a base in Nigeria,” he said.

Reacting to the development First Hydrocarbon’s Director, Alhaji Magaji Muhammed Inuwa, said the company was happy to have ACA as an investor, stressing that ACA’s involvement in its oil and gas business would guarantee it optimum development of OML 26.

“We welcome one of Nigeria’s leading private equity firms to the FHN shareholder register. ACA’s reputation for investing in, and supporting the growth of Nigerian ventures across all sectors is well recognised and we look forward to working with them to deliver on FHN’s vision of increasing indigenous ownership in the upstream sector of the Nigerian economy.

“Following the acquisition of a 45% interest in OML 26, FHN is focused on ensuring the optimum development of the field, while continuing to explore other acquisition opportunities,” Alhaji Inuwa said.

FHN was established in 2009 with the objective of increasing indigenous involvement in the upstream sector of the oil and gas industry.

The company recently acquired an interest in SPDC operated OML 26 and said it would continue to acquire and develop substantial oil and gas assets in Nigeria from the joint ventures between NNPC and major international oil companies.

55% of FHN is held by Nigerian institutions and investors and the company intends to list on the Nigerian Stock Exchange in the future, providing an opportunity for all Nigerians to invest in the sector in due course.