Heritage Oil Plc entered into a JV agreement with Bayelsa Oil Co. Ltd., which is owned by Nigeria’s Bayelsa state government. The agreement is aimed at establishing an indigenous Nigerian oil company called Petrobay Energy Ltd.
Through Petrobay, Heritage expects to be a significant contributor to the future development of the oil and gas industry in Nigeria.
Under the JV agreement Heritage will obtain a 45% equity interest in Petrobay which combines Bayelsa Oil Co.’s network of longstanding relationships in Nigeria with Heritage’s strong technical track record, diverse geographic expertise, and financial capability. A number of upstream assets in the state of Bayelsa and the larger Niger Delta region have been identified and Petrobay will engage in both bilateral and competitive auction processes to acquire these licenses. Petrobay will enable Heritage to build upon its current interests in Nigeria.
Heritage landed in Nigeria in November 2012 on the completion of the acquisition of a major interest in OML 30 through its interest in Shoreline Natural Resources Ltd. Shoreline acquired a 45% interest in OML 30 for cash consideration of $850 million, with NPDC holding the remaining 55% interest. OML 30 is located onshore in the Niger Delta, contains eight producing oil fields, and has been independently evaluated to contain gross proved and probable reserves of over 1.1 billion barrels, thereby containing some of the largest onshore oil reserves in the country.
Tony Buckingham, CEO, commented: “Heritage Oil is honoured to be entering into a commercial strategic alliance with the state of Bayelsa through the joint venture, Petrobay, with Bayelsa Oil Company. Petrobay will be uniquely positioned to acquire and develop hydrocarbon assets in the Niger Delta, where we can bring exploration and production expertise that, harnessed with the energy and aspirations of the people and state of Bayelsa, will generate value and benefits for all stakeholders. Petrobay will develop close relationships with local communities and other stakeholders in the Niger Delta in recognition of the key role their support plays in securing assets and delivering safe, stable and productive operations. This alliance reinforces Heritage’s commitment to a country with huge potential and the Company is well placed to play a significant role in the future oil and gas industry in Nigeria.”
Governor Henry Seriake Dickson of Bayelsa State, commented: “At a time when people are divesting oil assets in this area, no mention is made of our involvement. Today, that era of standing by and non-participation has ended. What we have signed is going to blossom and move from strength to strength and be strong enough to compete favorably with other competitors in the upstream and downstream sectors of the industry. Let me announce to all those stakeholders in the industry that Bayelsa State is ready for active participation in the oil and gas industry.”