Categories: EconomyNews

Global trader, Nigerian Firm In $530m Oilfield Deal

 

The world’s biggest oil trading firm, Vitol Group, the world’s biggest oil trading firm had 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, said the Nigerian firm on thursday.

The contract, finalised on Thursday with shoreline, will provide the company with cash to refinance existing debt and further develop the Oil Mining Lease 30 in the Niger Delta.

50,000 barrel per day is the current production of the field and has an estimated one billion barrels of oil reserves.45 percent in the field is what shoreline has as interest.

The European trading house has done other pre-financing deals for preferential access to oil and refined products in Kazakhstan, Iran and elsewhere, according to Reuters.

The Chairman, Shoreline Group, Mr. Kola Karim, was quoted as saying that the “transformational” deal would enable the company to step up gross production to as much as 100,000bpd over the next year.

Shoreline would seek to boost production to between 80,000 and 100,000bpd this year, Karim was quoted by Bloomberg to have said.

“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.

Shoreline is one of several Nigerian producers that bought onshore fields in the Niger Delta after international oil companies including Royal Dutch Shell Plc withdrew amid persistent attacks on infrastructure.

The local firms including Shoreline were hit by the militant attacks on oil and gas facilities in the Niger Delta in 2016 as they posted steep decline in production for over a year until June last year when the Forcados export terminal came back on stream. The production from Shoreline Natural Resources Limited rose from 115,376 barrels in May to 444,240 barrels in June, according to the latest data from the Nigerian National Petroleum Corporation.

Prior to the shutdown of the Forcados Terminal in February 2016 after the Trans Forcados Pipeline was attacked by militants, the indigenous firms had been hard hit by the persistent low oil prices as their revenues tumbled.

In January 2016 when oil prices were trading below $30 per barrel, Shoreline said it planned to cut 35 per cent of its nearly 2,000 workers to survive the “tough” conditions, Karim was quoted by Bloomberg to have said in an interview. The company also halted plans to issue $500m of Eurobonds.

Meanwhile, unsold barrels of crudes from West Africa could put pressure on the premiums of Malaysian crude cargoes for March loading, traders said, according to Platts.

Recent Posts

Harsh Economy: Nigerians React As President Tinubu Spotted With Over 60-Vehicle Convoy In Lagos

In a video making waves on social media platforms, Nigerians have reacted with mixed feelings…

12 hours ago

Man Arrested For Insulting President Tinubu, Sanwo-Olu, IGP

A popular Nigerian TikToker identified simply as Seaking has been arrested by operatives of the…

18 hours ago

The Longest Prison Sentences Ever Served

Throughout history, some individuals have endured extraordinarily long prison sentences, with their stories reflecting the…

19 hours ago

Families Call For Help As DSS Arrests Lovers In Osun Community

There is growing tension in Modakeke, Osun State, following the alleged arrest of two lovers,…

22 hours ago

Ibadan Stampede: I Regret Not Heeding Spiritual Warning – Woman Who Lost Two Kids

A victim of the stampede that occurred in Ibadan, Oyo State capital, which has claimed…

23 hours ago

Trending Stories In Osun Today

The vibrant Osun State is no stranger to captivating events and headlines that draw attention…

23 hours ago

This website uses cookies.