By Freya Berry and Joe Brock
LONDON/ABUJA, March 11 Nigerian oil company
Seplat plans to raise at least $500 million by selling shares on
the London and Lagos stock exchanges to pay down debt and snap
up assets being sold by energy majors in Africa's largest oil
producing nation, the company said.
Seplat, in which France's Maurel & Prom and
Swiss-based trader Mercuria both hold minority stakes, is among
consortia short-listed to bid for some $3 billion in assets
being sold by Shell and others, sources said.
Competition is stiff for the blocks in the Niger Delta,
which holds a large portion of Nigeria's 37 billion barrels of
reserves. The oil is high-quality, relatively easy to drill and
Nigerian firms say they can better handle security challenges
that have prompted the majors to divest.
Commodity trader Glencore, involved in marketing
Nigeria's crude oil and importing its fuel for decades, is among
the companies vying to enter its upstream sector.
The cash Seplat will raise puts it in a strong position as
it prepares for acquisitions in shallow-water areas, one sector
banker said, because foreign companies must partner up with
Nigerians in order to bid.
"The global offer proceeds will allow us to further
implement our business strategy, which includes acquiring new
assets," A.B.C Orjiako, Seplat's chairman and co-founder, said
Shell is selling its 30 percent stake in four oil
blocks, with France's Total and Italy's Eni
also set to profit from sales of their 10 percent and 5 percent
stakes. The Nigerian National Petroleum Corporation (NNPC) owns
the remaining 55 percent.
Shell is also selling the 97-km (60-mile) Nembe Creek oil
pipeline, which has been regularly attacked by oil thieves.
The London-listed major has already made $1.8 billion from
asset sales in Nigeria since 2010 as several oil majors divested
onshore blocks due to oil theft and a government drive to
increase local ownership.
Founded in 2009 by wealthy Nigerian businessmen Orjiako and
Austin Avuru, Seplat pumps about 60,000 barrels per day of oil
from three blocks it operates in the Niger Delta.
It bought a 45 percent stake in the blocks from Shell, Total
and Eni in 2010. NNPC owns the rest.
Seplat is also near completing a deal to buy a Niger Delta
oil block from Chevron, but a legal dispute between the
U.S. oil major and another Nigerian firm threatens to delay the
agreement, sources close to the process say.
Cash from the listing could go partly towards the Chevron
deal, the sources said.
A source close to Maurel & Prom said Seplat also planned to
use the cash to fund a bid for Shell's OML 29 oil block.
OML 29 is the most coveted asset of the four being sold. Its
output has peaked at 62,000 bpd of oil and 40 scf/d of gas and
holds reserves of 2.2 billion barrels of oil equivalent (boe),
according to a Shell prospectus seen by Reuters.
It is likely to fetch $1-$1.5 billion, industry sources
One of Seplat's directors, Basil Omiyi, was previously
Shell's Nigeria country head, but the firm is likely to face
competition from cash-rich Glencore.
Glencore has linked up with Nigerian traders Taleveras and
Aiteo for its bid on OML 29, say two oil industry sources.
These two firms are involved in Nigeria's crude-for-product
A source close to Maurel said Seplat's intention was to
float in June and its equity value was about $1 billion,
suggesting about half the company would be sold in the IPO.
BNP Paribas and Standard Bank are joint global
co-ordinators, while Renaissance Capital, Citigroup and RBC
Europe are joint bookrunners on the flotation.