SacOil Awarded Crude Allocation by the NNPC
SacOil and Energy Equity Resources (“EER”) (the “Partners”) signed a memorandum of understanding (“MOU”) to explore oil and gas opportunities in the Republic of Nigeria.
Pursuant to the initiative, SacOil and EER, was awarded a twelve (12) month term contract for the purchase of Nigerian Crude Oil Grades by the Nigerian National Petroleum Corporation (“NNPC”).
Overview of MOU
SacOil, a South African based independent African oil and gas company and EER entered into a MOU to seek investment opportunities in the business activities of the NNPC within the Nigerian oil and gas sector. The Republic of Nigeria is one of the most prolific oil and gas countries in Africa, with significant investment opportunities available in the current economic climate. The Partners have been evaluating a number of opportunities that could provide sustainable revenue returns.
SacOil announced the formation, at a minimal capital cost to SacOil, of a joint venture company with EER called SacOil Energy Equity Resources Limited (“SEER”). SEER is the contracting party to the agreement for the sale and purchase of Nigerian Crude Oil with the NNPC (“the Crude Oil Agreement”).
The Crude Oil Agreement provides SEER with the right to acquire crude oil from NNPC for onward sale. The amount of offtake by SEER is dependent on the aggregate crude production in Nigeria and the prevailing global oil price. The revenue generated from the sale of the crude allocation will contribute meaningful income to SacOil and will support SacOil’s growth and investment strategy across the oil and gas value chain on the African continent.
Commenting on the Crude Allocation, SacOil’s CEO Dr Thabo Kgogo said:
“This announcement is aligned with our previously communicated strategy to focus on cash generative, income producing activities in both upstream, refining and downstream. Nigeria is a prolific hydrocarbon nation and the largest exporter of crude oil on the African continent. We are pleased to have secured this crude allocation for trading as it provides us with a structured and measured exposure to this attractive market. We look forward to working with EER and the NNPC in future opportunities in the Nigerian oil and gas sector.”
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