Heritage Oil has announced that a wholly owned subsidiary has entered into a joint venture agreement with Bayelsa Oil Company, owned by the Bayelsa State government, to establish an indigenous Nigerian oil company called Petrobay Energy. Through Petrobay, Heritage expects to be a significant contributor to the future development of the oil and gas industry in Nigeria.
- Joint venture, Petrobay, combines Bayelsa Oil Company’s indigenous support from state government and local communities with Heritage’s strong technical track record and access to financial markets
- Heritage will own a 45% equity interest in Petrobay
- Petrobay will look to acquire production, development and exploration assets from international oil companies
- Offices will be established in Yenagoa, the capital of the state of Bayelsa, and employment sourced from local expertise
- The state of Bayelsa is in Southern Nigeria, the core of the Niger Delta, which contains many of the largest crude oil and natural gas deposits in the country
- Through Petrobay, Heritage will seek to gain access to additional producing fields and other licence opportunities in Nigeria both onshore and in shallow water
A wholly owned subsidiary of Heritage has entered into a joint venture agreement to establish Petrobay, an indigenous Nigerian oil company. Heritage will obtain a 45% equity interest in Petrobay which combines Bayelsa Oil Company’s network of longstanding relationships in Nigeria with Heritage’s strong technical track record, diverse geographic expertise and financial capability. A number of upstream assets in the state of Bayelsa and the larger Niger Delta region have been identified and Petrobay will engage in both bilateral and competitive auction processes to acquire these licences.
Petrobay will enable Heritage to build upon its current interests in Nigeria, which is Africa’s largest oil producer and contains the second largest oil reserves in the continent. Heritage’s footprint in Nigeria was established in November 2012 on the completion of the acquisition of a major interest in OML 30 through its interest in Shoreline Natural Resources. Shoreline acquired a 45% interest in OML 30 for cash consideration of $850 million, with the National Petroleum Development Company holding the remaining 55% interest. OML 30 is located onshore in the Niger Delta, contains eight producing oil fields and has independently been evaluated to contain gross proved and probable reserves of over 1.1 billion barrels, thereby containing some of the largest onshore oil reserves in the country.
Tony Buckingham, Chief Executive Officer, commented:
‘Heritage Oil is honoured to be entering into a commercial strategic alliance with the state of Bayelsa through the joint venture, Petrobay, with Bayelsa Oil Company. Petrobay will be uniquely positioned to acquire and develop hydrocarbon assets in the Niger Delta, where we can bring exploration and production expertise that, harnessed with the energy and aspirations of the people and state of Bayelsa, will generate value and benefits for all stakeholders. Petrobay will develop close relationships with local communities and other stakeholders in the Niger Delta in recognition of the key role their support plays in securing assets and delivering safe, stable and productive operations. This alliance reinforces Heritage’s commitment to a country with huge potential and the Company is well placed to play a significant role in the future oil and gas industry in Nigeria.’
Governor Henry Seriake Dickson of Bayelsa State, commented:
‘At a time when people are divesting oil assets in this area, no mention is made of our involvement. Today, that era of standing by and non-participation has ended. What we have signed is going to blossom and move from strength to strength and be strong enough to compete favourably with other competitors in the upstream and downstream sectors of the industry. Let me announce to all those stakeholders in the industry that Bayelsa State is ready for active participation in the oil and gas industry.’
[Heritage Oil Plc press release]