… Warns Against Assets Transfer
The Federal Government through the Ministry of Petroleum Resources has objected to the tactics adopted by South African company, Metallon Corporation Limited to takeover LEKOIL Nigeria Limited.
The objection is contained in a letter from the ministry signed by the Honourable Minister of State for Petroleum Resources, Chief Timipre Sylva.
Metallon Corporation, a south African company and a 15.10% shareholder in Lekoil had in November 2020 called for an Extraordinary General Meeting with a proposition to change Lekoil’s chairman and also introduce three new members into the company’s board under the guise of improving management oversight. The move if left unchallenged could give Metallon control of LEKOIL Nigeria and its strategic oil and gas assets in Nigeria.
“…such significant change of shareholding can only be carried out in close adherence with the Guidelines and Procedures for obtaining Consent to the Assignment of interest in Oil and Gas Assets dated 11th August 2014, issued pursuant to the Powers of the Honouroble Minister of Petroleum Resources under the Petroleum Act. 3,” the minister said.
“Articles 3 & 4 of the Guidelines of Ministerial Consent sets out the key elements of assignment of ownership and control of interests in Oil and Gas Assets and the requirements for securing Ministerial Consent.
“We cannot over-emphasize the consequences of non-compliance with the Ministerial Guidelines,” Chief Sylva cautioned in the letter.
An Africa-focused oil exploration and production company with interests in Nigeria, LEKOIL Nigeria has significant interest in a number of strategic Nigerian oil and gas assets which are important to Nigeria’s energy future.
These assets include the Otakikpo marginal field where LEKOIL has 40% interest; Ogo discovery and OPL 310 where LEKOIL has 17.14%; OPL 276 where LEKOIL has 45% and OPL 325 where LEKOIL has 62% interest.
Metallon on the other hand has been considered unfit to handle the management of LEKOIL Nigeria’s assets because it has no pedigree in the oil and gas industry. Also, its murky track record in the countries where it operates, especially in Zimbabwe, has led analysts to conclude that it could reduce LEKOIL’s ability to get funding to finance expansion projects which could adversely affect an industry which is strategic to Nigeria.
Metallon’s poor management in Zimbabwe led to litigations involving the Zimbabwean government, the UK Government and other partners, including labour. The Company’s huge debt profile, estimated at $200 million made it inevitable to give up three out of the four mines it previously operated in Zimbabwe in early 2019.
Metallon suspended operations after a group of workers applied to have business-rescue measures implemented at two of its mines. The workers, through their lawyers, said they were owed more than two years’ wages and benefits by Metallon.
Speaking on the developments recently, Mr. Lekan Akinyanmi Chief Executive Officer of Lekoil said “We are hopeful of an amicable solution to the issues that are at stake.”
“We have world-class assets which are extraordinary. It is taking a lot of work to get to where we want to be but we are making progress,” he said.