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Aiteo Group reiterates majority ownership of shares in Shell’s lucrative OML 29

By on October 11, 2014

imageThe hot news in African’s largest economy, oil industry, is the sharp disagreement between Aiteo Group and Taleveras, as both companies are claiming independent majority ownership of Royal Dutch Shell’s Nigerian oil block, Oil Mining License 29.

DailyPost can authoritatively report that either side is telling whoever cares to listen that it won the lucrative block and an associated pipeline with a bid in the region of over $2.6billion.

It has been established that OML 29’s remaining reserves (P1+P2) hold about 2.2billion barrels of oil equivalent (BOE), while its hydrocarbon fields could deliver as much as 160,000 barrels of oil per day and 300MMscf/d at peak.

The supposed tussle over OML 29 has been a subject of discussion within sector players in the last few days as it remains unclear which company actually spearheaded the bid.

Aiteo Group is under the leadership of Benedict Peters while Taleveras Group is founded and owned by Igho Sanomi.

The two are young Nigerian businessmen with strong ties to the presidency.

In a statement made available to DailyPost on Friday, Aiteo Group stated that it led a consortium of five other companies and has won the bid for the oil block.

It noted that the acquisition of OML 29, as well as the Nembe Creek Trunk line, a 60-mile pipeline, which has served as Nigeria’s major crude oil transportation channel- moving oil through the Niger Delta to the Atlantic coast, is a major boost for Nigerian Local Content Development initiative.

“This acquisition has deepened Nigeria’s indigenous participation in oil and gas exploration.

“Aiteo the major shareholder in the consortium purchase of Shell’s assets has promised to put its competence to bear in this new deal, which will see it execute the local content to the later”, it stated.

The company assured that this will translate to the creation of over 20,000 jobs in the exploration and production sub-sectors of the oil and gas industry.

But earlier, Forbes, quoting the World Street Journal, reported that Shell has agreed to sell the same “Oil Mining License 29, and an associated pipeline, for $2.5 billion to a consortium led by Taleveras Group, an oil trading firm founded and owned by a 39 year-old Nigerian multi-millionaire Igho Sanomi.”

The report added: “Taleveras will be getting a sweet deal. Of all the assets, Shell put up for auction, OML 29 was the most coveted. The Africa Oil & Gas Report magazine reports that OML 29’s remaining reserves (P1+P2) are about 2.2Billion barrels of oil equivalent (BOE), while its hydrocarbon fields could deliver as much as 160,000 barrels of oil per day and 300MMscf/d at peak, with focused, aggressive work programme.

“The Nembe Creek Trunk Line is also an extremely valuable asset as many other oil exploration companies in Nigeria pay to use it to transport their oil to international markets.”

According to the Wall Street Journal, a Shell spokesman said the Netherlands-based oil major has signed sales and purchase agreements for some of the oil mining leases that it was looking to divest, and would make a market announcement in the event of a successful completion.

In an apparent reaction to the report Aiteo described it as “erroneous and misleading”.

The company on Saturday categorically stated that “Aiteo Group-led consortium – not Taleveras Group – is the majority stakeholder in the deal with an 85 percent equity stake.”

It disclosed Shell, operator of the oil lease, has sold its 30 percent stake in the oil field and pipeline, while France’s Total Global and Italy’s Eni S.p.A. have sold off their 10 and 5 percent stakes, respectively, to local investors.

“The remaining asset balance of 55 percent will be retained by the Nigerian National Petroleum Corporation (NNPC) under a Joint Operating Agreement (JOA).”

The statement issued by Mrs. Oseyemi Oluwatuyi of the Communications Department further stressed that: “Contrary to erroneous reports, the Aiteo Group-led consortium – not Taleveras Group – is the majority stakeholder in the deal with an 85 percent equity stake.

“Therefore, it is total misinformation in the local and international media that it is the ‘Taleveras-led consortium’ that acquired OML 29 divested by Shell.”

Mrs. Oluwatuyi further noted that it had become necessary to “correct the misleading media reports about the acquisition of OML 29, the most prolific of the oil blocks sold off by Shell, after noting the discrepancy reported on numerous occasions.

“The Aiteo Group, whose major business areas include exploration and production, issued this statement in order to clarify various print and online media reports that carried misleading stories about the details of the transaction,” the official added.

Mrs. Oluwatuyi also explained that corrected the block’s price, putting the total cost of acquisition at $2.7bn, stating that while $2.562bn was the actual cost for the acquisition of the block and Nembe pipeline, additional funds have also been earmarked as working capital.

A breakdown of the shareholding structure cited by THISDAY Newspaper shows that the number of shares held by the consortium at 2.7 billion units, with Aiteo Energy Resources Limited holding a total volume of 2.294 billion shares, Tempo holding 270 million shares with its 10 percent equity, and Taleveras holding 135 million shares.

Aiteo Group insists that it beat out several indigenous and international companies as the preferred bidder for OML 29 and the Nembe pipeline.

However, not everyone walked away empty-handed in the sale of onshore oil blocks.

The Erotron Consortium, for example, won the bid for OML 18 – having offered $1.2bn for the oil block; Pan Ocean Oil Corporation Nigeria Limited, operator of the NNPC/Pan Ocean Joint Venture, clinched OML 24 after submitting a bid of $900M; and Crestar managed to secure OML 25 for $500M.