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Brass LNG suffers another setback

By on September 19, 2013

Brass LNG Limited, the two-train, 10 million-metric tonne per year project, has again suffered a setback as Oando Plc has terminated the purchase agreement it had with ConocoPhillips.

The Final Investment Decision on the Brass LNG project has suffered several setbacks, especially after one of the project’s promoters, ConocoPhillips, gave indications that it wanted to sell off its Nigerian assets.

Oando had before now been involved in a $1.5bn transaction to buy ConocoPhillips’ Nigerian assets, including a 17 per cent shareholding interest in Brass LNG, amounting to $198.4m.

But Oando is no longer going through with the Brass LNG acquisition.

The oil company was quoted by www.rttnews.com on Tuesday as saying that it had on Monday entered into  an amendment agreement with ConocoPhillips in relation to the proposed acquisition of the latter’s oil and gas business in the country.

Specifically, Oando was said to have announced the termination of the Brass LNG Purchase Agreement.

Oando was also said to have indirectly entered into an agreement with ConocoPhillips pursuant to which, among other things, it extended the outside date for the completion of the proposed ConocoPhillips acquisition from September 19 to November 30.

The report stated, “The company has agreed with ConocoPhillips to terminate the agreement to purchase the shares of Phillips (Brass) Limited, which holds a 17 per cent shareholding interest in Brass LNG Limited.”

As such, Oando will no longer have an obligation to pay the purchase price pertaining to the PBL of about $198.4m.

The report further stated, “As previously announced, in connection with the ConocoPhillips acquisition (including the purchase of PBL), the company paid a $435m deposit, of which $35m was advanced in connection with the Brass LNG Purchase Agreement.

“This deposit will be applied by ConocoPhillips to the purchase agreements pertaining to the acquisition of the balance of the ConocoPhillips Nigerian oil and gas business.”

As a result, the net purchase price payable to complete the acquisition of the remaining assets associated with the ConocoPhillips acquisition is estimated to be about $1.22bn after deducting the deposit and giving effect to adjustments as of the date hereof.

The Chief Executive, Oando, Mr. Wale Tinubu, had in April said the company was not struggling to raise money for the $1.5bn deal.

 

 

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