In a bid to raise its financial capital-base, Nigerian indigenous oil company Seplat is seeking a dual listing on the London Stock exchange (LSE) and Nigerian Stock Exchange (NSE), following a trend amongst local oil firms.
Seplat – which recently acquired oil assets from Royal Dutch Shell Plc in the Niger Delta region – is working with financial institutions such as BNP Paribas SA, Standard Bank Group Ltd and Renaissance Capital Financial Holdings Ltd, to actualise its dual listing target.
Nigerian oil companies currently trading on the LSE include Afren, Eland Oil & Gas, Heritage Oil, Mart Resources and MP Nigeria along with its latest addition Lekoil which raised $50 million – giving it a market capitalization of $112.1 million – after its listing.
The project manager, Nigerian National Resource Charter, Ademola Oshodi said “the LSE, being the premium exchange in Europe provides great opportunities for local Nigerian oil companies.”
“The presence of these indigenous companies on a foreign stage would greatly enhance foreign direct investment.” Ademola added.
According to the NSE, the entrance of more oil and gas companies into the Nigerian capital market is expected to contribute about $1.6 billion to the $1 trillion market capitalisation target it set this month.
Earlier this month, Ventures Africa reported that the NSE seeks to achieve $1 trillion market capitalisation by 2016.
“It is a good development that Nigerian oil and gas companies are now going into the stock exchange in Nigeria and outside.” said Adebayo Akinpelu, managing director, Fixital Nigeria Limited.
Venturing into foreign stock exchanges by indigenous oil firms will open up opportunities for the companies, enabling them to raise funds for more exploration and production activities while diversifying the risks. The MD explained.
Analysts however believe the new trend is a clear departure from the previous approach, when the owners wanted to be the sole shareholders of their companies.
According to BusinessDay Nigeria, Seplat has an estimated worth of $1.6 billion.
Information from Ventures Africa was used in this report.