PETROFAC to invest 15b naira in Nigeria

PETROFAC said it had concluded arrangements to spend 15 billion naira to acquire a 15% interest and assist Nigeria√≠s Seven Energy Company with the development of its production, processing and transportation assets across the country (US$1=150 Naira). ‘Nigeria has very substantial underdeveloped hydrocarbon reserves combined with a large population, whose growing demands for energy are currently not being met. Nigeria is forecast to be one of the fastest growing emerging countries and she is planning for significant growth in the energy and Power sectors,’ the private Guardian newspaper quoted the firm as saying in a statement.

‘However, significant new infrastructure is needed to meet Nigerian government targets. It aims to increase power generation capacity to 10,000 megawatts by 2011. The gas infrastructure alone will cost around US$30 billion, not including upstream development costs,’ PETROFAC said. Seven Energy is a Niger-Delta based Oil/Gas Company, set up in 2006. The Company has issued warrants to PETROFAC which, subject to the U.K. firm’s satisfaction of certain performance conditions and milestones in relation to project execution, will enable it to invest up to a further US$52 million into Seven Energy and take its interest to 19.2% on a fully diluted basis.

The company said it would be providing experienced personnel to assist with the delivery of Seven Energy’s key existing projects and will be represented on its board and management committees. The agreement also provides for an arrangement between PETROFAC and Seven Energy in relation to co-investment opportunities in Nigeria. In addition to PETROFAC’s investment, existing and new investors have agreed to invest a further US$50 million in Seven Energy. Seven Energy Company also recently entered into an alliance agreement with the Nigerian Petroleum Development Company (NPDC) to provide technical support and development funding for NPDC’s interest in oil mining licenses (OML) 4, 38 and 41 in exchange for a profit sharing entitlement to NDPC’s share of hydrocarbons produced therein.