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Nigerian oil firms to raise $1bn for expansion

By BusinessNews Staff on March 14, 2014

Two Nigerian oil and gas companies have announced plans to raise about $500m each to expand their operations, making a total of $1bn.

A Nigerian upstream independent firm, Seplat Petroleum Development Company, said in a Similarly, Japaul Oil and Maritime Services Plc announced that it would spend about $500m to expand its offshore business in Africa.

The Chairman, Seplat Petroleum, Dr. Bryant Orjiako, said the company planned a dual listing of ordinary shares on the London Stock Exchange and the Nigerian Stock Exchange.

He said, “The global offer proceeds will allow us to further implement our business strategy, which includes acquiring new assets.

“Seplat has a disciplined approach to acquiring new onshore and shallow-water assets in the Niger Delta, which will be strictly adhered to.”

Orjiako also said the target was to grow the gross operated production of oil and condensate to 85,000 barrels per day by the end of 2016, with at least 100 per cent annual reserves replacement from the existing assets.

The statement recalled that Seplat bought a 45 per cent interest in 2010 in three oil leases from Shell and was appointed the operator by the Nigerian oil industry authority. Its average crude output tripled after the acquisition, to more than 50,000 barrels a day in 2013 along with 99 million standard cubic feet of gas.

Seplat had appointed BNP Paribas SA and Standard Bank Group Limited (SBK) as joint coordinators and book-runners, it said. Renaissance Securities Cyprus Limited, Citigroup Inc (C) and RBC Europe Limited would act as joint book-runners while Stanbic IBTC Plc and Renaissance Securities Nigeria Limited were appointed as Nigerian joint issuing houses, it added.

The company said its full-year revenue rose 41 per cent to $880m, while its operating profit rose 45 per cent to $479m during the same period.

According to the statement, Japaul Oil and Maritime Services Plc will raise between $400m and $500m for the expansion.

The Chief Executive Officer, Mr. Jegede Paul, told Bloomberg that the company was studying loans, bonds and stocks or a combination of the three to raise money after appointing a consulting firm a month ago.

He said the company planned to buy ships and equipment to expand in about 12 countries in Africa over the next five years, adding that it was looking at nations with viable maritime and oil industries such as Angola, Equatorial Guinea and Ghana for investments.

The company, according to him, is now in Nigeria, the United Arab Emirates and Oman.

According to him, Japaul plans to expand in areas such as dredging, offshore vessel chartering, marine equipment leasing, oil and gas engineering, procurement and installation services.

He said, “There is a lot to be made in this industry if we have sufficient equipment.”

Japaul sees earnings rising from 10 per cent to 25 per cent this year after slumping 59 per cent to N486m ($3m) in the first nine months of 2013 as it raised short-term funds to buy assets. The company targets 25 per cent profit growth from 2015 on the contributions from acquisitions.

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