Yemisi Izuora
West Africa-focused oil and gas group Savannah Petroleum is mobilizing resources to enable it acquire more assets in bilateral deals in Nigeria that are producing or can easily be put into production.
The company already produces around 20,000 barrels of oil equivalent mainly gas per day (boe/d) in Nigeria after it bought Seven Energy’s onshore fields last year, including proven and probable reserves of 92 million boe, and a 200 million standard cubic feet per day gas plant and 260 km (160 miles) of pipelines.
Buyers of its oil include Exxon Mobil and for its gas public institutions whose payments are guaranteed by the World Bank.
A variety of onshore assets in Nigeria are up for grabs, with oil major Shell still divesting and the government also planning a fresh licensing round for inland basins.
Sources told Reuters that some indigenous companies are looking to offload assets that they purchased when during oil prices were high, but do not have the cash to develop.
The oil firm is also considering selling a minority stake in its Niger assets before first oil flows there, which is expected in 2021, Chief Executive Andrew Knott said on Monday.
Savannah in 2014/15 was awarded the R1, R2, R3 and R4 permits in southeast Niger’s Agadem Rift Basin, which has 975 million barrels in proven and probable reserves and output of 20,000 barrels per day.
“I would expect us to retain at least 50 percent,” Knott told Reuters, adding the deal would probably consist of an upfront cash payment for back costs as well as money to cover future spending.
Savannah’s Niger permits contain an estimated 2.8 billion barrels of oil in recoverable resources. As part of its drilling campaign in Niger, Savannah discovered light oil in the R3 permit area last week.