Glencore, Vitol offer backing to Seplat, others to buy stakes in Petrobras' Nigerian oilfield - Report
Brazil’s state-run oil company, Petroleo Brasileiro SA is planning to sell its 50 percent stake in an African oil exploration venture
Banking and industry sources told Reuters that cash is being lined up to buy stakes in the two major oilfields in Nigeria which is expected to favour a local firm.
According to the report, trading and mining giant Glencore was looking to back Nigerian producer Seplat in bidding for the assets while Vitol is examining backing several bidders in the process but the two global firms declined to comment on the process.
Other firms that had participated in the bidding round were Swiss-based commodities trader Mercuria and oil major BP’s trading division.
Recall that on November 7, 2017, Brazil’s state-run oil company, Petroleo Brasileiro SA announced plans to sell its 50 percent stake in an African oil exploration venture as part of a wider divestment plan and offload a $21 billion assets through mid-2018 and cut debt.
BTG Pactual E&P BV, a subsidiary of Grupo BTG Pactual SA, controls a 40 percent stake while Helios Investment Partners holds the remaining 10 percent in the joint venture.
"The venture has stakes in two offshore blocks that contain two producing fields, the major Agbami field in OML 127, operated by a local Chevron affiliate and the Akpo field in OML 130 operated by Total SA.
"The result of the auction is expected to be announced in early May but some participants said the assets might not be sold in one package," according to Reuters.
Industry sources hinted that the winner of the Petrobras blocks would likely be a Nigerian firm due in part to government pressure and the local content laws recently signed by President Muhammadu Buhari.
President Muhammadu Buhari had on February 5, 2018, signed an Executive Order 5 to improve local content in public procurement with science, engineering and technology components. The Order is expected to promote the application of science, technology and innovation towards achieving the nation’s development goals across all sectors of the economy.
The Executive Order, however, notes that where expertise is lacking, procuring entities will give preference to foreign companies and firms with a demonstrable and verifiable plan for indigenous development, prior to the award of such contracts.
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